28 ELR 10477 | Environmental Law Reporter | copyright © 1998 | All rights reserved

European Community Environmental Law: Institutions, Law Making, Enforcement, and Free Trade

Editors' Summary: In this Article, which will be published later this year as part of the Environmental Law Institute's European Community Deskbook, 2nd Edition, the authors familiarize the reader with the intricacies of the European legal system. They begin by describing the anatomy of European Community law — its institutions, procedures, implementation methods, and enforcement mechanisms. Throughout this description, the authors examine environmental legislation and court decisions, thus explaining the European Community's environmental system and revealing the complex relationship between the Community and its member states. From there the authors move to a more detailed explanation of the European Community's power to adopt environmental measures and of the important role the principle of the free movement of goods plays in environmental law making. The authors conclude the Article, which constitutes the first half of the Deskbook's commentary, with a discussion of the extension of the European Community's environmental laws to European Free Trade Area countries and accession countries. The second half of this primer on European Community environmental law will be published in an upcoming edition of ELR's News & Analysis.

Mr. Hunter is a partner in the Brussels office of Hunton & Williams and heads the firm's European regulatory practice. Mr. Muylle serves as legal advisor to the Belgian Senate and was previously an associate in the Brussels office of Hunton & Williams.

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Over the past decade, the erstwhile European Economic Community, has received not only new titles (European Union (EU) and European Community (EC)) and new members (Austria, Finland, and Sweden), but also expanded powers. At the same time, European environmental legislation has grown ever more expansive and detailed, and member states have with increasing frequency found policy options constrained by Community legislation and free movement principles.

However, the influence of Community law does not stop at Community external frontiers. Through the European Economic Agreement, most Community law has been expanded to Iceland, Liechtenstein, and Norway. With enlargement negotiations underway with five Central European countries, the influence of Community environmental law and policy is being extended to the five "accession" countries — Estonia, Hungary, Poland, Slovenia, and the Czech Republic — and indeed beyond to other countries aspiring to EU membership.

This Article, which constitutes the first half of the commentary for the upcoming second edition of the European Community Deskbook explains and comments on EC institutions, law making, law application, enforcement, and free trade principles. This Article also discusses the expansion of EC law to Iceland, Liechtenstein, and Norway, as well as legal and administrative arrangements for extending EC law and policy to the five accession countries. The second part, to be published in a forthcoming edition of ELR's News & Analysis, will treat the body of EC environmental law.

Anatomy of EC Law

Institutions

The European Community, which was created in 1957 by the Treaty of Rome¹ (EC Treaty), has four principal institutions: the Commission, the Parliament, the Council of Ministers, and the Court of Justice. In the most basic of terms, the Commission initiates legislative proposals and seeks to ensure the application of existing Community law. The Council and — since the 1992 Treaty on European Union² — the Parliament legislate on the basis of Commission proposals. In some cases, however, the Parliament merely advises by commenting on Commission proposals before the Council decides. The Court reviews the legality of acts of the institutions and interprets Community law.

The Commission, which is based in Brussels, has a monopoly on the initiation of legislation and is responsible for supervising member state implementation and application of Community law.³ It consists of 20 Commissioners: two from each large state (Britain, France, Germany, Italy, and Spain) and one from each small state (Austria, Belgium, Denmark, Finland, Greece, Ireland, Luxembourg, the Netherlands, Portugal, and Sweden). The Commissioners, who are usually politicians, are nominated by their national governments. After approval by the Parliament, they are appointed to five-year terms by the Council. Each Commissioner has one or more areas of responsibility, and the relevant parts of the Commission's bureaucracy report to the Commissioner responsible for its department. Each Commissioner also has a small staff, or "cabinet," of personal appointees who act as advisors and assistants. The Commission's bureaucracy is segregated into "Directorates-General," each responsible for specified fields. The part responsible for environmental matters is Directorate-General XI (DG XI), and the Commissioner with the assigned responsibility (as of this writing) is the Dane Ritt Bjerregaard.

The Council of Ministers, the most powerful of Community institutions, is ultimately responsible for making or adopting laws.⁴ It is composed of representatives of member states, usually the ministers responsible for the subject matter at issue (e.g., if environmental protection is at issue, the national environmental ministers will attend). The chairmanship, or Presidency, of the Council rotates with six-month terms among the member states. The Council is assisted on a daily basis by the Brussels-based Committee of Permanent Representatives (COREPER), which is staffed by officials from national ministries and is engaged in the continual process of negotiating terms of proposed legislation.

The European Parliament consists of popularly elected representatives from the member states. The Parliament is an itinerant — its official provisional base and much of its secretariat are located in Luxembourg; its members and their staff have offices in Brussels, where most committee meetings and some plenary sessions are held; and its monthly plenary sessions take place in Strasbourg in the facilities of another European organization, the Council of Europe. Its role in the legislative process varies depending on the legal basis of proposed legislation.⁵

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The Court of Justice, which is based in Luxembourg, has jurisdiction in Community law matters.⁶ The Court is composed of 15 judges.⁷ The Court is assisted by eight advocates-general who make "reasoned submissions" on cases brought before the Court. In each case before the Court, an advocate-general prepares an opinion, which is often relied on heavily by the Court in its judgment and, in any event, often presents a much more thorough analysis than the cryptic judgments of the Court.⁸ The judges and the advocates-general are nominated by the member states and appointed by the Council of Ministers for renewable six-year terms, with half of the positions being renewed each three years.⁹ If the Court finds that a member state has failed to comply with a prior judgment, it may impose a lump-sum or penalty payment.¹⁰

Legislative Procedures

The Community's three legislative processes are the consultation, cooperation, and co-decision procedures.¹¹ The legislative procedure used is determined by the legal basis of the proposed legislation. When legislation is proposed by the Commission under the consultation procedure, the Parliament is afforded an opportunity to comment on the Commission's proposal. These comments usually take the form of an opinion and a legislative resolution conveying the opinion to the Council and Commission. After the Parliament has been thus "consulted," the Council may adopt the Commission's proposal.¹²

When proposed legislation is based on Article 130s of the EC Treaty (the environmental power), the Parliament is afforded greater opportunities to have its views reflected in proposed legislation through a complicated process known as the "cooperation" procedure. When legislation is based on a provision requiring cooperation,¹³ the Commission's proposal is sent to the Parliament for a "first reading," at which stage the Parliament must issue an opinion on the proposal. The Commission often makes modifications of varying importance to the proposal in response to the Parliament's opinion. After the Parliament's opinion has issued and the Commission has made any amendments, the Council may then, acting by a qualified majority, reach an agreement or "common position" on the proposal. The proposal, as agreed to by the Council, then returns to the Parliament for a "second reading." At that stage, there are a number of potential outcomes.¹⁴ If the Parliament approves the proposal on the second reading, the Council may adopt it by a qualified majority. If the Parliament rejects the proposal on the second reading, the Council may adopt it only by a unanimous vote. If the Parliament proposes amendments to the proposal, the Commission may reexamine the proposal, incorporate the amendments in thinks appropriate, and send the reexamined proposal to the Council. The Council may then adopt the reexamined proposal by a qualified majority, may modify and adopt the reexamined proposal by a unanimous vote, or may of course simply fail to act.

The Treaty on European Union, adopted in Maastricht on February 2, 1992 (often called the "Maastricht Treaty"), added a third legislative procedure, which grants the Parliament a veto power.¹⁵ When proposed legislation is based on Article 100a, the main harmonization power,¹⁶ the Parliament may "co-decide" on the legislative proposal.¹⁷ If after the Parliament's "second reading," the Council refuses to take into account the Parliament's proposed amendments, the proposal is sent to a "conciliation committee," consisting of an equal number of representatives of the Council and the Parliament.¹⁸ If negotiations in the conciliation committee are inconclusive, the Council may adopt the legislative proposal. However, the Parliament then may veto the act.¹⁹

The choice of legislative basis has become an important [28 ELR 10480] constitutional question in the ongoing power struggle among Community institutions.²⁰ Harmonization measures based on Article 100a, for instance, now have to be adopted pursuant to the co-decision procedure, giving the Parliament a veto power. Environmental measures based on Article 130s require the Parliament's cooperation, but the Council may overrule the Parliament. The same problems arose in the past when measures based on Article 100a required the cooperation procedure, while for Article 130s consultation sufficed. Thus, the choice of Article 100a, rather than Article 130s, increases the power of the Commission and especially the Parliament vis-a-vis member states in the Council.

It is against this backgroundthat the European Court of Justice decided the Titanium Dioxide case.²¹ In this case, the Commission had proposed a directive intended to regulate environmental aspects of the operation of titanium dioxide plants. It had proposed this directive under Article 100a. The Council, despite objections of the Commission and the Parliament, changed the basis of the proposed directive to Article 130s (the environmental protection legal basis at that time required the consultation procedure) and adopted the directive in 1989 on a unanimous vote. In a typically allusive and illusive opinion, the Court concluded that the change of legal basis by the Council was improper and annulled the directive.

According to the Court, the choice of the legal basis cannot depend only on the opinion of a Community institution, but must be based on "objective elements susceptible to judicial control."²² Among these elements are the purpose and contents of the legislation. In the instance of the 1989 titanium dioxide directive, the purpose and contents concerned, in an inseparable fashion, protection of the environment and the elimination of disparities in the conditions of competition.²³ Thus, it would appear that both Articles 130s on environmental protection and 100a on harmonization would be appropriate, but, as the legislative procedures of the two differ, it was not possible to use both legal bases. According to the Court, a dual legal basis would jeopardize an "essential element" of the cooperation procedure, namely, the increased involvement of the Parliament in the legislative procedure.²⁴ It was therefore necessary to determine which of the two provisions was the appropriate legal basis. The Court held that Community legislation that approximates national production conditions to eliminate distortions of competition "is conductive to the attainment of the internal market and thus falls within the scope of Article 100a."²⁵ According to the Court, measures under Article 100a would take environmental concerns sufficiently into account, as that provision requires the Commission to take a high level of environmental protection as a basis for its proposals.

The Court thus adopted a wide interpretation of Article 100a to cover measures eliminating distortions of competition, even if environmental considerations lay at the origin of these measures. The ruling has been criticized because it would exclude Article 130s as a legal basis for legislation concerning the protection of the environment. According to some, this case law would render Article 130s superfluous.²⁶

The Court seems to have taken this criticism into consideration when the Commission challenged the Council's decision to use Article 130s as a legal basis for Directive 91/156 on Waste²⁷ (Framework Directive on Waste).²⁸ The Commission's proposal was based on Article 100a. Having to decide whether the directive should have been adopted on the basis of Article 100a, rather than Article 130s, the Court held that the fact that some provisions of the directive affect the functioning of the internal market is not sufficient for Article 100a to apply. The Framework Directive on Waste had only incidental effects in harmonizing market conditions for waste. The purpose of the directive was rather to implement "the principle that environmental damage should as a matter of priority be remedied at source, [which was] laid down by Article 130r(2) of the Treaty as a basis for action by the Community relating to the environment."²⁹ Hence, the Council's decision to use Article 130s as the legal basis was accepted by the Court. Similarly, in 1994, the Parliament sought annulment of Regulation 259/93 on the Supervision and Control of Shipments of Waste Within, Into, and Out of the European Community,³⁰ arguing that the measure should have been adopted on the basis of Articles 100a and 113, rather than on the basis of Article 130s.³¹ The Court, however, approved the opinion of Advocate-General Jacobs that "the aim of the Regulation is not to define those characteristics of waste which will enable it to circulate freely within the internal market, but to provide a harmonized set of procedures whereby movements of waste can be limited in order to secure protection of the environment."³² The Court thus deemed that Article 130s was the appropriate legal basis.

Delegated Rulemaking

EC directives and regulations frequently delegate to the Commission — working through either technical committees (so-called comitology) or the European standards body, the Comite Europeen de Normalisation (CEN) — the task of developing detailed rules necessary for implementing and updating EC legislation. There are, of course, good reasons for rulemaking delegation: the cumbersome EC legislative process is poorly suited for settling multitudinous regulatory details and incapable of revisiting those details with each evolution of knowledge and circumstance. However, although delegation grows more necessary as EC law becomes [28 ELR 10481] more pervasive, the EC's methods have increasingly attracted criticisms for lack of accountability.³³

The 1991 Hazardous Waste Directive³⁴ presents a good example of comitology. The law requires the Commission — working with a technical committee made up of national "experts" (bureaucrats) — to draft and, from time to time, revise a hazardous waste list.³⁵ This list determines the scope of EC hazardous waste regulation. Under this process, the Commission submits a proposal to national experts. If the national officials, on the basis of weighted majority voting, approve the proposal, it may be adopted as a Commission decision. If they reject the proposal, the Commission may send the proposal to the Council, which then has three months to act. During that time the Council may adopt the Commission's proposal or may modify it. If the Council fails to act in a timely fashion, the Commission proposal becomes law.

Despite the political import, the comitology process removes this hazardous waste definition work from the scrutiny of the public and the national legislatures. The Commission and national bureaucrats leak drafts to trade associations and environmental groups and listen with some tolerance to views of "interested parties." However, there is no open and structured opportunity for the public or national legislatures to monitor and comment. Nor need the Commission and national bureaucrats explain how they reached their final decisions.

Comitology has attracted sharp criticism, not least from the European Parliament. In 1994, as a result of the Parliament's complaints, the Council, the Commission, and the Parliament entered into an inter-institutional agreement designed to ensure that the Parliament is informed of work undertaken in technical committees and offered an opportunity to comment.³⁶ Though this procedure may have assuaged parliamentary anxieties, it does little to render the process more open or accountable. Members of the European Parliament typically lack the technical knowledge or interest to monitor in an adequate way the work of technical committees.

The EC's use of its other major rulemaking device, standards bodies such as CEN, grew out of the drive to foster the common market through harmonizing inconsistent national product safety rules.³⁷ Rather than defining detailed safety standards necessary for placing products on the EC market, the EC sets "essential requirements." For instance, toys must not "present health hazards."³⁸ It then delegates to standards bodies, staffed by "technical experts" principally from interested companies and national administrations, the elaboration of what the essential requirements mean. After preparing its standards, CEN submits them to the Commission. If accepted by the Commission, the standards effectively become detailed technical rules applicable through-out the EC.

Since the early 1990s, the EC has expanded its reliance on standards bodies to other areas, such as the environment. For instance, the EC Packaging and Packaging Waste Directive requires that packaging be either "reusable" or "recyclable" in order to be placed on the EC market.³⁹ The directive provides vague, essentially meaningless, definitions and then delegates to CEN the task of devising detailed definitions of these legal terms. Once accepted by the Commission, these CEN standards will set regulatory requirements for placing packaging on the EC market.

Effect of Community Law

The two most common forms of Community legislation are regulations and directives.⁴⁰ Regulations become law throughout the Community as of their effective date. Their provisions are directly and generally enforceable in each member state according to their terms; hence, they may create legal rights and obligations without further national legislation.⁴¹ As the Court has said, regulations "have direct effect and are[,] as such, capable of creating individual rights which national courts must protect."⁴² Directives, broadly speaking, are not directly and generally enforceable. They set out goals for the member states to achieve through implementing national legislation. Article 189 of the EC Treaty states that a directive is "binding, as to the results to be achieved, upon each Member State to which it is addressed, but [allows] the national authorities the choice of form and methods." Directives are thus thought to offer a flexible legislative device for setting generic requirements that member states can implement through national legislation in accordance with national institutions and traditions.⁴³

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[] National Implementation of Community Directives. The Court has rendered a number of opinions on the characteristics of national implementing measures necessary to satisfy the obligations of Article 189 of the EC Treaty.⁴⁴ In implementing a directive, a member state must use national provisions of the same legal status and character as prior laws (e.g., statutes where they are typically used, decrees where they are normally used, and so on)⁴⁵ and must implement a directive "in a way which fully meets the requirements of clarity and certainty in legal situations …."⁴⁶ In many cases, member states have sought, in addressing their implementation obligations, to avoid the need to enact new legislation by relying on administrative practices (e.g., circulars) carried out under existing legislation. The Court has rejected this approach: "Mere administrative practices, which by their nature can be changed as and when the authorities please and which are not publicized widely enough cannot in these circumstances be regarded as a proper fulfillment of the obligation imposed by Article 189 on Member States to which the directives are addressed."⁴⁷

[] "Direct Effect" of Directives. Though in theory only regulations are directly applicable throughout the Community without further national legislation, directives may also, even in the absence of adequate implementing national legislation, create legal rights and obligations — that is, they may, in Community parlance, have "direct effects." The notion is that directives, though not normally directly applicable Community law, are nonetheless binding on member states.⁴⁸ A member state should not be able to avoid burdens entailed in properly implementing a directive when the member state itself has failed in its obligations to implementthe directive. As the Court stated in Pubblico Ministero v. Ratti:⁴⁹

[W]here the Community authorities have, by means of directive, placed Member States under a duty to adopt a certain course of action, the effectiveness of such an act would be weakened if persons were prevented from relying on it in legal proceedings and national courts prevented from taking it into consideration as an element of Community law. Consequently a Member State which has not adopted the implementing measures required by the directive in the prescribed periods may not rely, as against individuals, on its own failure to perform the obligations which the directive entails.⁵⁰

Not every obligation set forth in a directive has direct effects. An individual may rely only on provisions that are "unconditional and sufficiently precise"⁵¹ against the state that failed to implement the directive in national law by the end of the transposition period. According to the Court, a provision is sufficiently precise to be relied on by an individual "where the obligation which it imposes is set out in unequivocal terms."⁵² A directive's provision is unconditional "where it is not subject, in its implementation or its effects, to the taking of any measures either by the institutions of the Community or by the member states."⁵³ As Advocate-General Reischl has argued in Ratti, a directive's provision may have direct effects if it "does not leave the Member States any margin of discretion in the performance of [their] obligations."⁵⁴

Becker v. Finanzamt Munster-Innenstadt⁵⁵ demonstrates what the Court means by sufficiently precise and unconditional. Ursula Becker, a credit negotiator, applied to the German government for exemption from tax on her transactions on the basis of Directive 77/388 on the Harmonization of the Laws of the Member States Relating to Turnover Taxes.⁵⁶ Under German legislation, she was subject to a turnover tax on her transactions. The directive, in Article 13B(d)(1), provided, "Member States shall exempt the following under conditions which they shall lay down for the purpose of ensuring the correct and straightforward application of the exemptions and preventing any possible evasion, avoidance or abuse: … (d) the following transactions: (1) the granting and the negotiation of credit …."⁵⁷

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In considering whether the exemption provision of the directive satisfied the direct effect conditions so that Becker could rely on it in the face of conflicting German legislation, the Court first considered whether the directive's provision was "sufficiently precise" in defining the legal circumstances. The Court stated, "[i]nasmuch as [the provision] specifies the exempt service and the person entitled to the exemption, the provision, taken by itself, is sufficiently precise to be relied upon by an individual and applied by a court."⁵⁸

The issue of whether the provision was "unconditional" was more complicated. The Court pointed out that the provision allows member states to set "conditions" on the exemptions, but noted that these conditions are to be for the purpose of ensuring the correct and straightforward application of the exemptions. According to the Court, a member state may not rely — as against a taxpayer falling within one of the directive's exemption categories — "upon its failure to adopt the very provisions which are intended to facilitate the application of that exemption."⁵⁹ Moreover, these "conditions" refer to measures to prevent evasion, avoidance, or abuse, and a member state that has failed to take the necessary precautions "may not plead its own omission in order to refuse to grant to a taxpayer an exemption that he or she may legitimately claim under the directive."⁶⁰ The Court then concluded that the provision was not only sufficiently precise but also unconditional and thus could be relied on as directly applicable law in a national court by a person falling within the class of exemptions.

Examples from a couple of environmental cases may help to illustrate the direct effects doctrine. Directive 85/337 on Environmental Impact Assessments⁶¹ requires an assessment of all development projects listed in Annex I to the directive. Projects listed in Annex II were to be subjected to an impact assessment "where member states consider that their characteristics so require."⁶² According to the Court, the obligation to prepare an environmental impact assessment for Annex I projects is precise and unconditional and may therefore have direct effect. One might have thought, however, that, as regards Annex II projects, member states have a margin of discretion so as to preclude direct effect. The Court has held:

[A]lthough the second paragraph of Article 4(2) of the directive confers on member states a measure of discretion to specify certain types of projects which will be subject to an assessment or to establish the criteria or thresholds applicable, the limits of that discretion are to be found in the obligation set out in Article 2(1) that projects likely, by virtue inter alia of their nature, size or location, to have significant effects on the environment are to be subject to an impact assessment.⁶³

The discretion of member states was thus sufficiently limited by the directive to enable private individuals to rely on the environmental impact assessment requirement for Annex II projects that have significant environmental effects on the environment. Private individuals could challenge a decision of a member state that exceeded its discretionary power not to require an assessment.

On the other hand, the Court has rejected the suggestion that Article 4 of Directive 75/442 on Waste,⁶⁴ which requires member states to take measures ensuring that waste is recovered or disposed of without endangering human health and without using processes or methods that could harm the environment, had direct effect.⁶⁵ According to the Court,

[Article 4] indicates a program to be followed and sets out the objectives which the member states must observe in their performance of the more specific obligations imposed on them by Articles 5 to 11 of the directive …. Thus, the provision at issue must be regarded as defining the framework for action to be taken by the member states regarding the treatment of waste and not as requiring, in itself, the adoption of specific measures or a particular method of waste disposal. It is therefore neither unconditional nor sufficiently precise.⁶⁶

Member states are given discretion as to the method of waste disposal they may adopt to achieve the directive's objectives. An individual may therefore not rely on the directive to compel a member state to adopt one method (e.g., recycling or incineration) rather than another (e.g., landfill).

A critical question with respect to the direct effects doctrine is who may be vested with rights against whom. Article 189 of the EC Treaty makes a directive "binding … upon each Member State to which it is addressed …." On this basis, the Court has concluded that, where a member state has failed to implement adequately a directive or has adopted measures not in conformity with a directive, a person affected by that conduct may rely on the directive as against the member state.⁶⁷ The Court has rejected the contention, however, that a directive may also impose obligations on individuals vis-a-vis other individuals (so-called horizontal effects). In Marshall v. Southampton & South-West Hampshire Area Health Authority,⁶⁸ the Court observed that a directive's [28 ELR 10484] binding nature exists only in relation to the member states to whom it is addressed. Thus, according to the Court, "a directive may not of itself impose obligations on an individual and … a provision of a directive may not be relied upon as against such a person."⁶⁹

[] Consequences of Direct Effect. It is increasingly becoming clear that Community law, even when not adequately implemented into national law, may have important implications for private parties. Take for example the challenge by a private party in the Netherlands to a permit to discharge substances containing lead and cadmium in surface waters. Directive 76/464 on Discharges of Dangerous Substances⁷⁰ provides that national authorities can grant only temporary permits to discharge "blacklisted" substances such as lead and cadmium. The Dutch implementing legislation prohibited the discharge of lead and cadmium altogether. However, this prohibition did not apply to other substances containing lead and cadmium residues. The Environment Minister issued a permit to discharge lead and cadmium residues. The Council of State, the highest administrative court in the Netherlands, annulled the Minister's decision for failure to consider the requirements of the directive.⁷¹

Another example is the action brought by a female employee against the British Gas Corporation, claiming that she had been dismissed on discriminatory terms. The House of Lords referred a preliminary question to the Court of Justice, asking whether the plaintiff could rely on Directive 76/207 on Equal Treatment at Work, Article 5(1).⁷² The United Kingdom had failed to transpose the directive into national law. The Court ruled that the directive had direct effect and could be relied on against "organizations or bodies which were subject to the authority or control of the state,"⁷³ including British Gas, at that time a nationalized gas undertaking. Private individuals may therefore invoke the direct effect of directives not only against traditional government authorities, but also against partially privatized companies that are still under government control.⁷⁴

Legal actions such as these are founded on a line of Court of Justice jurisprudence establishing that all national authorities, including regional and local subdivisions of the national governments, and publicly owned companies, regardless of the national constitutional structure, must implement and apply Community law.⁷⁵ The Court has held that, when a member state has failed to transpose a directive, national courts have to interpret, as much as possible, national [28 ELR 10485] law in the light of Community law.⁷⁶ If there is no national law measure incorporating a Community provision, the national authority must apply the Community provision as if it had been properly incorporated. Where national provisions contradict Community law, the national provisions must be set aside and Community requirements applied.⁷⁷ A national authority must apply the Community law provision, even if that may affect the interests of individuals,⁷⁸ and failure to apply Community provisions may render the national authority's actions unlawful. Lastly, depending on national law, it may be possible for individuals and interest groups to compel the national authorities to apply the Community provisions, which may in turn affect the interests of, for example, a company holding a permit or seeking a prior authorization.

The significance of these principles in the context of environmental law will perhaps be clearer with a couple of examples. One Community environmental directive that could have direct effects with implications for individual facilities is Directive 80/779 on Air Quality Limit Values and Guide Values for Sulphur Dioxide and Suspended Particulates.⁷⁹ This directive prescribes mandatory air quality standards for sulphur dioxide and suspended particulates. These standards, expressed in numerical criteria set out in an annex, apply across the Community, and member states are allowed no ambit in choosing the areas to which they apply. Even in the absence of adequate implementing national law measures, industrial facilities emitting sulphur dioxide and suspended particulates could be affected by these Community standards. Advocate-General Mischo stated in Commission v. Germany that:

[t]here are individual ordinary citizens who derive the right to ensure that the air they breathe conforms to fixed standards of quality as against those physical or legal persons who by reason of their activities are sources of potential pollution upon which the two directives⁸⁰ in question impose restraints …. The duty of member states to ensure that concentrations in the air of the substances do not exceed the deemed acceptable levels is mirrored by the right of individuals to rely upon the said standards when they are not complied with either in fact or by measures adopted by the public authorities.⁸¹

A regulatory authority, on its own initiative, might therefore impose stricter emission limits on individual permits so as to attain these air quality standards within a noncomplying zone. Depending on national law concerning issues such as standing, it may be possible for an individual or an interest group to bring an action against the regulatory authority to compel compliance with the air quality standards, which may in turn force the regulatory authority to modify the permit conditions of existing industrial facilities to bring the air quality into compliance.⁸²

A second example is Directive 85/337 on Environmental Impact Assessment.⁸³ Much like the U.S. National Environmental Policy Act (NEPA),⁸⁴ Directive 85/337 requires preparation of an environmental impact assessment containing prescribed information for listed projects. As explained above, this obligation has direct effect for all projects listed in Annex I and at least for some projects listed in Annex II of the directive.⁸⁵ Failure to comply fully, either by the developer or the government authority granting the development consent, may render the development consent unsound and put the developer undertaking the project at risk. The English Court of Appeal has ruled, for instance, that an infrastructure project and a ministerial consent order to a compulsory purchase order adopted without a required environmental impact assessment were subject to judicial review, as were the consequences that followed from the project and the order.⁸⁶ Affected individuals and interest groups have brought actions challenging the lawfulness of the government's grants of development consent or building permits, forcing the developer to halt the project, even when the developer had extended substantial financial resources or begun construction.⁸⁷ In some member states, it [28 ELR 10486] may also be possible for an affected individual to obtain a damage award from the government for any harm suffered as a result of, for example, diminution in the value of the individual's property caused by the development. Environmental groups have also sought to challenge Commission decisions to grant subsidies to projects adopted without a required environmental impact assessment.⁸⁸

[] State Liability. Some member states are often late to implement Community law directives into national law.⁸⁹ Other states incorporate directives in their legal order, but fail to apply them. In response, the Court of Justice attempted to enhance member states' implementation performances. It held in Francovich v. Italy⁹⁰ that when a member state fails to take all measures necessary to achieve the results prescribed by a directive, there should be a right of reparation for private individuals whose Community law rights were infringed. Mr. Francovich was an employee of an Italian company that was declared bankrupt. He had a claim for outstanding wages of up to six million lire. Council Directive 80/987 on Insolvency Protection⁹¹ guaranteed payment of unpaid wage claims in the event of the insolvency of the employer by an independent guarantee institution financed by public authorities and/or employers. Italy had failed to take the necessary implementing measures. Questioned by a national court about whether a member state is obliged to make good losses and damages suffered by individuals as a result of the failure to transpose directive 80/987, the Court ruled that such a right of reparation existed if the directive granted rights to individuals who could be identified on the basis of the provisions of the directive. Moreover, the plaintiff would have to establish that a member state's failure to implement a directive actually caused the damages he suffered.

After the Francovich ruling, it was generally thought that the principle of state liability was limited to the specific circumstances of the case (i.e., to damages for failure to implement directives). In Brasserie de Pecheur/Factortame No. 3,⁹² the Court significantly developed its case law. The Court was asked whether member states had to compensate damages caused by a legislative act infringing Community law. The Court held that in any case in which a member state breaches Community law, whatever the organ of the state whose act or omission was responsible for the breach, a state may be liable for losses and damages suffered by individuals. The Court thus created a Community right for damages for a member state's breach of Community law. For a private individual to be able to claim damages, he or she must show that the infringed rule confers rights on him or her and that the breach of Community law is manifest and "sufficiently serious." A state may be held liable for a clear infringement of Community law, not for a divergent interpretation of a regulation or a directive.⁹³ However, when a member state is under an obligation to implement a directive within a given period, its failure to take any measure to transpose the directive constitutes per se a serious breach of Community law.⁹⁴ Private individuals like Mr. Francovich, who suffer damages because a member state failed to transpose a directive, therefore have to show only that the directive was intended to confer on them certain rights and that the member state's failure caused the damages.

The Court's willingness to grant private individuals rights to claim damages against negligent member states fits into a strategy that goes back to the Court's judgment in Van Gend en Loos⁹⁵ in the early 1960s. The Court seeks to involve private individuals in the supervision of member states' compliance with their Community law obligations. As a result of this jurisprudence, the Commission will not be the sole actor ensuring member states' compliance with Community law. The threat of liability actions brought by private individuals will likely encourage member states to implement directives in a more timely fashion.

Supervision of National Enforcement of Community Law

The EC Treaty assigns the primary responsibility to member states for the application of Community law.⁹⁶ It then assigns the Commission the duty of ensuring that member [28 ELR 10487] states properly implement and apply Community law,⁹⁷ and enables the Commission to bring actions against a member state before the Court of Justice for failure in implementing and applying Community law, these being called Article 169 proceedings.⁹⁸

[] Uncertain Implementation and Application of Community Environmental Law. The Intergovernmental Conference negotiating the 1992 Treaty on European Union adopted a Declaration 19 on the implementation of Community law. The declaration stressed "that it is central to the coherence and unity of the process of European construction that each Member State should fully and accurately transpose into national law the Community directives addressed to it within the deadlines laid down therein." The declaration "considers it essential for the proper functioning of the Community that the measures taken by the different Member States should result in Community law being applied with the same effectiveness and rigour as in the application of their national law."⁹⁹

The declaration confirmed what several institutions had vigorously denounced in the past, namely the erratic application of Community law, and more particularly its environmental law, by the member states. Over the years, the Parliament has adopted a number of resolutions on the need for monitoring the application of Community environmental law¹⁰⁰ and the preparation of monitoring reports by the Commission.¹⁰¹ The Council of Ministers, in its June 1990 Dublin "Declaration on the Environment," called for more effective application of Community environmental law.¹⁰² In the same vein, the Commission prepared in 1990 an extensive and critical report on member state application of Community environmental law as part of its annual Report to the European Parliament on Commission Monitoring of the Application of Community Law — 1990.¹⁰³ This report, entitled Monitoring of the Application of Environmental Directives by the Member States (Environmental Implementation Report), promised heightened scrutiny and pressure on member states to apply Community environmental law properly. The Commission recited in the Environmental Implementation Report the inadequacies, nation-by-nation and sector-by-sector, of the application of Community law and the difficulties, if not obstruction, it has encountered in trying to monitor national implementation. The Commission observed that timely implementation into national law was "rare"¹⁰⁴ and that instances of nonconformity of national law with Community law were "relatively numerous."¹⁰⁵ Even when member states had communicated to the Commission their implementing national measures, the Commission had difficulty in verifying that implementation.¹⁰⁶

More recently, in October 1996, the Commission issued a communication concerning the implementation of Community environmental law indicating that little progress has been made since the 1990 report.¹⁰⁷ According to the communication, the Commission registered in 1995 a total of 265 suspected breaches of Community environmental law based on complaints from the public, Parliamentary questions, and petitions and cases detected by the Commission.¹⁰⁸ This was over 20 percent of all the infringements registered by the Commission in that year. In October 1996, over 600 environmental complaints and infringement cases were outstanding against member states, with 85 cases pending before the Court of Justice. Some member [28 ELR 10488] states had failed to transpose as many as 22 environmental directives.¹⁰⁹

[] Enforcement Tools — Complaints and Article 169 Proceedings. Complaints by individuals to the Commission regarding infringements of Community law are, at present, instrumental in the enforcement of Community law.¹¹⁰ To facilitate the lodging of these complaints, the Commission has published a standard complaint form specifying the information necessary for the Commission to undertake an investigation.¹¹¹ These complaints should not, however, be confused with legal actions. They amount to nothing more than a means for individuals to notify the Commission of potential Community law violations.

Article 169 of the EC Treaty¹¹² sets out the formal infringement procedure that may be used by the Commission when a member state has failed to execute its obligations under the Treaty. The Article 169 procedure has three distinct stages: (a) a letter of formal notice, (b) a reasoned opinion, and (c) an application to the Court of Justice.

If the Commission is of the view that a member state is failing to fulfill its obligations under the Treaty, the Commission may send a formal letter of notice specifying the issues of contention. This first stage of the Article 169 procedure is intended to afford the member state the opportunity to explain its conduct or legislation and to give the Commission a chance to convince the member state to correct its errors.¹¹³ The formal letter of notice also defines the issues in dispute, enabling the member state to prepare its defense. The formal letter of notice limits the issues that may subsequently be raised in consequent judicial proceedings. Under the Court's rulings, the Commission may not, during the subsequent judicial stages, add to the complaint issues that were not raised in the formal letter of notice.¹¹⁴

If the dispute is not resolved to the Commission's satisfaction on the basis of the letter of notice, the Commission may then prepare a reasoned opinion setting forth definitively its legal position. The reasoned opinion specifies the Commission's views on how Community law is being infringed and sets forth the Commission's rationale — its underlying legal arguments.¹¹⁵

Should the dispute still not be resolved to the Commission's satisfaction, the Commission may make an application to the Court of Justice.¹¹⁶ The Commission does not need to establish a legal interest "since, in the general interest of the Community, its function is to ensure that the provisions of the Treaty are applied by the Member States and to note the existence of any failure to fulfill the obligations deriving therefrom, with a view to bringing it to an end."¹¹⁷ A judgment by the Court pursuant to Article 169 may, however, at most, result in a declaration of infringement of Treaty obligations by the member state and an award of legal costs.

If the Court finds that a member state has failed to fulfill an obligation under the Treaty, the state has to comply with the Court's judgment, lest the state run the risk of an Article 171 penalty. In hopes of remedying the chronic noncompliance with Community law, the Treaty on European Union grants the Court the power to impose lump-sum or penalty payments on member states that do not comply with its rulings. When a member state has failed to comply with a previous judgment of the Court, the Commission may issue a reasoned opinion specifying the details of the non-compliance and a deadline for compliance. If the member state fails to meet the deadline, the Commission may bring an action before the Court seeking a penalty payment.

Although the Commission has announced that it will make full use of Article 171 in ensuring full compliance by the member states with their environmental law obligations determined by the Court of Justice,¹¹⁸ it at the same time acknowledged [28 ELR 10489] that the procedures under Articles 169 and 171 are problematic instruments for enforcing Community environmental law.¹¹⁹ According to the Commission, the infringement procedures are not particularly suited to prevent degradation or damage to the environment or to deal with a large number of legal actions that could result from the daily application of environmental regulations and directives by a large number of people throughout member states. Moreover, Article 169 is directed against the central government of member states only, while the implementation of Community legislation often takes place at lower levels.

[] Administrative Reforms. The Commission proposed in its 1996 communication Implementing Community Environmental Law several "new areas for action" to enhance the application of Community environmental law. The Commission explained that the Parliament, the Ombudsman,¹²⁰ and its own services receive a large number of complaints about environmental matters arising at the local level. The Commission argues that these complaints might be dealt with in a more efficient way within member states and is therefore considering whether to establish minimum criteria for procedures and investigations relating to environmental complaints.¹²¹ The Commission suggests tentatively that environmental protection could be better ensured by granting a right of standing to environmental groups or individuals and announces that it "will examine the need for guidelines on the access to national courts by representative organizations with a view to encouraging the application and enforcement of Community environmental legislation."¹²² According to the Commission, there is also a need to ensure that minimum inspection tasks are carried out. It therefore suggests the adoption of inspection guidelines requiring member states to set up inspectorates, or equivalent bodies, and defining minimum criteria for inspections.

Although the Council welcomed some of the Commission's proposals,¹²³ it did not embrace others. Regarding the Commission's idea to provide private individuals and environmental groups access to justice, the Council invited the Commission "to submit a report on the existing administrative and judicial mechanisms to deal with complaints of citizens and NGOs."¹²⁴ As of this writing, the Commission has not yet submitted such a report. The member states' reluctance to embrace the Commission's proposals is comprehensible, as they would imply Community intervention in national procedural rules and would, of course, result in challenges to national government decisions and omissions. The Court has so far held that the member states enjoy procedural autonomy and that "it is for the domestic legal system of each member state to designate the courts having jurisdiction and to determine the procedural conditions governing actions brought under Community law."¹²⁵ Under the Commission's proposals, the Community would determine at least part of these procedural conditions, in particular the standing issue.¹²⁶

In its response to the Commission's communication, the Council did, however, encourage further development of the Network for the Implementation and Enforcement of Environmental Law (IMPEL). The IMPEL network consists of an informal network of representatives of national environmental authorities and of the Commission who regularly meet to exchange information and discuss difficulties in the enforcement of community environmental law.¹²⁷ The IMPEL network may also develop common views on general questions regarding implementation and enforcement, as well as on draft proposals for Community legislation. IMPEL members meet every six months. In May 1997, two committees were set up, one dealing with "policy issues" and the other dealing with "technical issues." These committees may create working groups to address specific issues. The working groups have produced technical guidelines for pollution control and worked on reports outlining (a) legislation, (b) organization and mechanisms for inspection, monitoring, and enforcement, and (c) inspection criteria. Also, IMPEL has set up an ad hoc working group focusing on cross-border waste shipments, a subject matter that has produced a number of investigations across Europe over the past couple of years.

[28 ELR 10490]

Power to Adopt Environmental Measures

Having discussed the Community's structure, its law making method, and the effect of those laws, the Article's focus now shifts to the Community's ability to legislate with respect to the environment. Prior to the incorporation of Article 100a and the environment title, Title XVI¹²⁸ — with its three articles, 130r through 130t — into the EC Treaty in 1987 by the Single European Act,¹²⁹ the Treaty included no explicit reference to an environmental law power. Since their incorporation, these specific environmental powers have come to serve as the principal bases for new legislation.¹³⁰

The lack of a specific environmental power before the Single European Act did not prevent the Community from venturing into the domain of environmental policy. As early as 1967, the Council adopted Directive 67/548 on Classification, Packaging, and Labeling of Dangerous Substances,¹³¹ and in 1970 the Council adopted directives on noise levels¹³² and automobile emissions.¹³³ This and other early environmental legislation were founded either on Article 100,¹³⁴ authorizing Community action to harmonize standards, or on Article 100 together with Article 235, the provision enabling the Community to take measures necessary for the achievement of Community objectives. As neither provision referred specifically to environmental protection as a proper field of Community action, there was some uncertainty over the Community's competence in this area.

[] Article 100 — Harmonization. Article 100 enables the Community to legislate in order to achieve the approximation of "such laws, regulations or administrative provisions of the Member States as directly affect the establishment or functioning of the common market."¹³⁵ There was some question of whether it served as an adequate basis for certain Community environmental measures. In 1980, the Court considered, in Commission v. Italy,¹³⁶ the legal basis of Directive 73/404 on the Biodegradability of Detergents,¹³⁷ which had been founded on Article 100. Italy, which had failed to implement the directive, challenged the competence of the Community to adopt this measure as a directive and argued that the measure constituted a convention drawn up in the form of a directive. The Court noted that while the directive was aimed in part at environmental protection, it also fell within the Community's program for the elimination of technical barriers to trade resulting from disparities between national legal provisions. Thus, according to the Court, Article 100 was an adequate legal basis:

[I]t is by no means ruled out that provisions on the environment may be based upon Article 100 of the Treaty. Provisions which are made necessary by considerations relating to the environment and health may be a burden upon the undertakings to which they apply and if there is no harmonization of national provisions on the matter, competition may be appreciably distorted.¹³⁸

Thus, it would appear that, as national measures designed for environmental and health protection could impinge on intra-Community trade, environmental and health protection are proper domains for "harmonizing" legislation based on Article 100. Little scrutiny seems to have been given to whether there was in fact a direct effect on intra-Community trade — the mere possibility that the environmental and health protection measures "may" affect intra-Community trade was apparently sufficient.

[] Article 235 — Necessary for a Community Objective. Where there is not a sufficiently direct effect on the internal market to justify reliance on Article 100, the Commission is able to turn to Article 235. This article authorizes Community action where, although the EC Treaty provides no specific power, that action is "necessary to attain … one of the objectives of the Community…."¹³⁹ There would thus appear to be two principal preconditions to the use of Article 235, namely (a) that the measure is aimed at a Community "objective," and (b) that the measure is "necessary" in attaining that objective.

Since the introduction by the Single European Act of Title XVI into the EC Treaty, and even more since the 1992 Treaty on European Union, there can hardly be any doubt that the protection of the environment is one of the "objectives" of the Community. Article 2 of the EC Treaty states that the Community shall have as "its task" the promotion of "a harmonious and balanced development of economic activities, sustainable and non-inflationary growth respecting the environment, … and the raising of the standard of living and quality of life…." Article 3(k) provides that to achieve its task, the Community's activities include "a policy in the sphere of the environment."¹⁴⁰ The Court of Justice had already concluded in 1985 in its typically summary fashion [28 ELR 10491] that environmental protection is one of the Community's "essential objectives."¹⁴¹

As for the requirement of a measure being "necessary" to obtain a Community objective, the adjective "necessary" has unsurprisingly not received rigorous treatment by the Court of Justice. One Commission legal official has gone so far as to assert that "if the Community by adopting action programs has documented its political view on the measures that are to be the subject of Community legislation, there is no need for further proof of the necessity for Community action."¹⁴² This may be the result that obtains — a result that is perhaps similar to what the U.S. Supreme Court allows with congressional "findings" of effect on interstate trade when Congress bases legislation on its power to regulate interstate commerce.¹⁴³

The broadly formulated objectives of the Community, and the willingness of the Court to accept that a measure is necessary, give the Community a potentially unlimited legislative power. However, measures based on Article 235 require unanimity in the Council, granting each member state the power to oppose an extension of Community action. Moreover, the use of Article 235 is limited by the fact that it is a residuary power to be used "only where no other provision of the Treaty gives the Community institutions the necessary power to adopt the measure in question."¹⁴⁴

[] Article 100a — Harmonization. The Single European Act provided specific Treaty foundations for environmental policy in 1987. In particular, it added Article 100a on harmonization,¹⁴⁵ which includes a specific reference to environmental protection, and Title XVI (formerly Title VII) on the environment. Article 100a authorizes the Council to act by a "qualified majority" to adopt measures to complete the internal market, including proposals "concerning health, safety, environmental protection and consumer protection." These measures are to take as a base "a high level of protection."¹⁴⁶ Paragraph 4 of Article 100a provides that:

If, after the adoption of a harmonization measure by the Council acting by a qualified majority, a Member State deems it necessary to apply national provisions on grounds of major needs referred to in Article 36, or relating to protection of the environment … it shall notify the Commission of these provisions.¹⁴⁷

The Commission shall confirm the provisions involved after having verified that they are not a means of arbitrary discrimination or a disguised restriction on trade between member states.¹⁴⁸

What limitations might govern the member states' measures? May a member state apply any stricter measures of its choosing, so long as they are not "disguised" protectionist measures? One might assume from Paragraph 4 above that the national measures must be based on "major needs" within the meaning of Article 36 or national measures "relating to environmental protection."¹⁴⁹ One might also assume [28 ELR 10492] that the limitations developed in the Court's jurisprudence on Article 36 would also apply. That would mean, for example, that the member state must choose the means that would least interfere with intra-Community trade (the least restrictive means) and that the means should not have negative effects disproportionate to its objective (the so-called proportionality requirement).¹⁵⁰

One of the criticisms of the Single European Act was that the introduction of Article 100a(4) threatened the achievement of the internal market and would lead to a balkanization of the Community.¹⁵¹ So far member states have rarely had recourse to this provision.¹⁵² However, the explicit authorization for member states to adopt new legislation derogating from harmonization measures may encourage member states to have more regular recourse to Article 100a(4).¹⁵³

[] Title XVI (Articles 130r to 130t) — the Environment Title. Title XVI, which includes Articles 130r to 130t, is the environmental title of the EC Treaty. Article 130r addresses the objectives to be pursued by Community "action" relating to the environment: (a) to preserve, protect, and improve the quality of the environment; (b) to contribute toward protecting human health; (c) to ensure a prudent and rational utilization of natural resources; and (d) to promote measures at the international level to deal with regional or worldwide environmental problems.

The Community is to legislate to the extent that these objectives can be attained better at the Community level than at the level of the individual member states.¹⁵⁴ The practical significance of this limitation, the so-called subsidiarity principle, is more political than legal and is unlikely to operate as a real limitation on legal competence. A plausible case for the superiority of Community action could be made in the case of most any legislative proposal, and it would seem that the Court would be compelled to accept the decision of member states that the objectives they want to achieve with a proposed measure could in fact be better attained at the Community level.

The policies or "principles" to be followed are that (a) Community action should aim at a high level of protection, (b) preventive action should be taken, (c) environmental damage should be rectified at the source, and (d) the polluter should pay.¹⁵⁵ Environmental protection requirements must be integrated into the Community's other policies. Again, it can be doubted whether these "principles" will have anything more than political significance. Even in that domain, they have become more shibboleths than policies for action, as they are at best vague generalizations and are not well suited to strict legal application.

Community environmental legislation is to take account of such things as "environmental conditions in the various regions" and "the economic and social development of the Community as a whole and the balanced development of its regions."¹⁵⁶ On the basis of this provision, it could be argued that the Treaty recognizes that Community legislation may draw distinctions between the "various regions," perhaps even in ways conflicting with the principles of freedom of movement of goods and services.

When legislative measures are adopted under the provisions of Title XVI, the cooperation procedure is used.¹⁵⁷ For a limited number of areas — the most important being provisions primarily of a fiscal nature (e.g., eco-taxation) — the Parliament is merely to be consulted.¹⁵⁸ The Council and the Parliament co-decide to adopt a general action program setting out priority objectives for the Community's environmental policy.¹⁵⁹

[28 ELR 10493]

Title XVI further provides that the "protective measures adopted pursuant to Article 130s shall not prevent any Member State from maintaining or introducing more stringent protective measures. Such measures must be compatible with this Treaty."¹⁶⁰ This provision should be contrasted with Article 100a, the harmonization provision, which does not admit variant measures, except through the "opting-out" procedure allowing the Commission to vet the national measures to ensure that they are not in fact designed to prejudice intra-Community trade. Under the Title XVI provision, member states may adopt measures compatible with the Treaty, which would appear to mean that Title XVI does not permit national legislation in conflict with Articles 30 and 59, the principles of free movement of goods and services. In that case, the Title XVI test may have much the same effect as the "discrimination" test applied under the Article 100a "opting-out" procedure. Under Article 100a(4), the Commission has to confirm the national measure, while under Article 130t, a member state simply has to notify the derogation.

Free Movement of Goods

To achieve the objectives laid down in Article 2 of the EC Treaty — "harmonious, balanced and sustainable development of economic activities, sustainable and non-inflationary growth respectful of the environment, a high degree of convergence of economic performance" — the activities of the Community include the establishment of a common market, involving the abolition of obstacles to the free movement of goods, persons, services, and capital between member states.¹⁶¹ Under Article 7a of the EC Treaty, the common market shall comprise an area without internal frontiers in which the free movement of goods, persons, services, and capital is ensured.¹⁶² The Court of Justice has held that the EC Treaty aims to achieve economic integration leading to the establishment of a common market.¹⁶³ The free movement principle is implemented by Articles 12 to 17 of the EC Treaty, prohibiting all custom duties on imports and exports between member states, and by Articles 30 to 37, eliminating quantitative restrictions between member states.

[] Customs Duties and Charges Having Equivalent Effect. Article 9 of the EC Treaty provides that:

the Community shall be based upon a customs union which shall cover all trade in goods and which shall involve the prohibition between member states of customs duties on imports and exports and of all charges having equivalent effect, and the adoption of a common customs tariff in their relations with third countries.¹⁶⁴

Customs duties between member states were completely abolished by June 1968.¹⁶⁵ Member states may not introduce any new custom duties or any charges having equivalent effect between them.¹⁶⁶ Member states rarely have purported to introduce or maintain customs duties as such.¹⁶⁷ They have, however, imposed other charges on imports or exports, such as a charge to pay for the costs of a statistical survey on imported goods¹⁶⁸ or to cover the expenses of a quality control of exports.¹⁶⁹ According to the Court, these payments were prohibited charges equivalent to customs duties. The Court adopted a broad definition of the concept "charges equivalent to customs duties."

Any pecuniary charge, however small and whatever its designation and mode of application, which is imposed unilaterally on domestic or foreign goods by reason of the fact that they cross a frontier, and which is not a customs duty in the strict sense constitutes a charge having equivalent effect, even if it is not imposed for the benefit of the state, is not discriminatory or protective in effect and if the product on which the charge is imposed is not in competition with any domestic product.¹⁷⁰

The Court has, however, accepted that fees levied for services rendered to the importer or exporter are not charges equivalent to custom duties and are thus not prohibited by Article 12 of the EC Treaty. Rather, such a fee is lawful if the trader benefits directly from a specific service and if the amount of the fee is proportionate to the benefit obtained.¹⁷¹

A member state could require a health certificate to import animals orplants in order to prevent the spread of a [28 ELR 10494] harmful disease and to protect animal and plant health, and it could impose a health test at the border on importers who do not have the required certificate. A fee for such a test would be lawful if the amount does not exceed the costs incurred by the health inspection and if the state accepts the results of tests that took place in another member state.

[] Quantitative Restrictions and Measures Having Equivalent Effect. Increasingly, national environmental measures create impediments to the free movement of goods. For example, in the Danish Bottle case,¹⁷² a Danish law required beer and soft drinks producers or importers to establish a deposit-and-return system for empty containers and to use only reusable containers approved by the National Agency for Protection of the Environment. Foreign beer and soda producers had to repackage the products that they had lawfully marketed in other member states. Moreover, the take-back obligation for used bottles imposed considerable transport costs on foreign producers.¹⁷³ Other environmental measures the Court has dealt with concern, for instance, a Dutch law prohibiting the sale of a rare wild bird that had been lawfully caught and killed in the United Kingdom,¹⁷⁴ a municipal regulation prohibiting supermarkets from providing their customers with nondegradable plastic bags,¹⁷⁵ and a ban on all imports of foreign waste.¹⁷⁶

Such measures — measures having equivalent effect within the meaning of Community law — are prohibited by Article 30 of the EC Treaty.¹⁷⁷ According to the Court, "all trading rules enacted by member states which are capable of hindering, directly or indirectly, actually or potentially, intra-Community trade are to be considered as measures having an effect equivalent to quantitative restrictions"¹⁷⁸ (the so-called Dassonville formula) and are, in principle, prohibited.¹⁷⁹

Trade restrictive measures may nevertheless be justified if they aim at achieving a legitimate objective.¹⁸⁰ In a well-known case commonly referred to as Cassis de Dijon,¹⁸¹ the Court held that:

Obstacles to movement in the Community resulting from disparities between the national laws in question must be accepted in so far as those provisions may be recognized as being necessary in order to satisfy mandatory requirements relating to the effectiveness of fiscal supervision, the protection of public health, the fairness of commercial transactions and the defense of the consumer.¹⁸²

[28 ELR 10495]

The Court recognized that trade-restrictive environmental measures aim at a legitimate objective. The Court held in the Danish Bottle case that "the protection of the environment is one of the Community's essential objectives, which may as such justify certain limitations of the principle of the free movement of goods."¹⁸³

However, it should be pointed out that a measure restricting the free movement of goods may not go beyond what is necessary for the effective protection of the general interest at issue. A member state has to adopt the least restrictive measure to achieve the legitimate objective. A central issue in assessing the legality of a measure restricting the free movement of goods is therefore its proportionality, a concept heavily relied on in Community law. The Court asks a double question: (1) whether the measure contributes to the realization of the legitimate objective it aims at; and (2) whether that objective could be achieved by means less restrictive of intra-Community trade.¹⁸⁴ Moreover, the incidental burden on trade cannot be excessive in relation to the benefits of the measure. A very restrictive measure with very small beneficial effect on the desired objective would not be justifiable.

The Court stated in the Danish Bottle case that "measures adopted to protect the environment must not go beyond the inevitable restrictions which are justified by the pursuit of the objective of environmental protection."¹⁸⁵ The issue thus becomes whether an environmental measure restricts trade more than necessary (i.e., whether it is proportionate to its stated aim).

In practice, the Court renders lip service to the free movement rules and leaves the member states a considerable margin of discretion to adopt environmental measures. In the Danish Bottle case, for instance, the Court held that the obligation for producers to use only approved containers was disproportionate to the environmental objective as foreign producers would be obliged to manufacture or purchase containers of a type already approved. The additional costs would be so high for foreign producers that imports into Denmark would become unviable. The Court upheld, however, the deposit-and-return system for empty containers. The Court stated simply that the deposit-and-return system was an indispensable element of a system intended to ensure the reuse of containers. Therefore, the restrictions imposed on the free movement of goods could not be regarded as disproportionate.¹⁸⁶ The Court disregarded the fact that the deposit-and-return system protected the Danish drinking industry from foreign corporations.¹⁸⁷ Foreign producers were unable to market in Denmark drinks in containers lawfully used in other member states, because those containers (e.g., metal cans) were incapable of complying with the deposit-and-return system.

The Court's attitude became even more obvious in the Walloon Waste case.¹⁸⁸ The Walloon government adopted a decree prohibiting the storage, tipping, or dumping in Wallonia of all waste originating in another member state (or in another region of Belgium). The Belgian government argued that nonrecyclable and nonreusable waste had no intrinsic commercial value and could therefore not be considered a good within the meaning of Article 30. According to the Court, objects that are shipped across a frontier for the purposes of commercial transactions are in fact goods subject to Article 30 protections.¹⁸⁹ Waste is therefore to be regarded as goods, the movement of which should in principle not be prevented. However, the Court went on to say that "with respect to the environment, it is important to note that waste is a matter of a special kind."¹⁹⁰ The accumulation of waste, opined the Court, would constitute a danger to the environment, considering the limited capacity of each region or locality for waste reception. The Court then stated simply that:

In the instant case the Belgian Government argued, without being contradicted by the Commission, that in view of the abnormal large-scale inflow of waste from other regions for tipping in Wallonia, there was a real danger to the environment, having regard to the limited capacity of that region. It follows that the argument that the contested measures were justified by imperative requirements of environmental protection must be considered to be well founded.¹⁹¹

The Court concluded that the waste ban did not violate Community law.

Both these cases demonstrate the latitude the Court grants member states to adopt environmental measures.¹⁹² In the Danish Bottle case, the Court simply asserted that the deposit-and-return system is "imperative" for a system to [28 ELR 10496] re-use containers. It did not consider whether the environmental benefits of such a system would outweigh the restrictions to trade. In the Walloon Waste case, it asserted in a similar fashion that the ban on foreign waste was "imperative" for the protection of the environment.¹⁹³ In those circumstances, the free movement principle hardly creates a restriction on member states' powers to adopt environmental measures restrictive of trade.¹⁹⁴

[] Technical Standards Directive. In a recent report, the Commission noted that member states are imposing an ever-increasing number of technical rules that can disrupt the single market.¹⁹⁵ To prevent member states from surreptitiously adopting technical regulations that create barriers to trade, the Technical Standards Directive¹⁹⁶ creates a mechanism for reviewing national regulations prior to their enactment. Under the directive, member states are to notify the Commission of "any draft technical regulation."¹⁹⁷ Technical regulations are defined as rules concerning the characteristics (i.e., quality, performance, safety, or dimensions), marketing (e.g., packaging and labeling requirements), and use of products.¹⁹⁸ A notifying member state must explain why the product regulation is necessary. In addition, if the regulation would restrict the marketing or use of a product on health, consumer, or environmental grounds, the member state concerned must submit relevant data concerning the product along with a risk assessment, which must explain the anticipated effects of the measure.¹⁹⁹

The notification starts a three-month standstill period during which the member state must refrain from adopting the draft regulation. During this period, the Commission and the other member states may submit comments to the notifying state. The Commission and member states may also issue a "detailed opinion to the effect that the envisaged measure creates obstacles to the free movement of goods within the internal market."²⁰⁰ If a "detailed opinion" is issued, the standstill period is extended another three months, and the notifying state is obliged to respond to criticisms raised in the detailed opinion. That state may, however, proceed with adopting its regulation, notwithstanding any such criticisms, so long as it complies with the standstill procedure.²⁰¹

Member states have often failed to comply with the directive. In the Netherlands, a government official drew up in 1996 a list of some 400 organizations that had not been properly notified. As of this writing, some 83 infringement proceedings are currently outstanding. To encourage member states' compliance, the Court of Justice ruled that private individuals may rely on the Technical Standards Directive before national courts. According to the Court, "it is undisputed that the aim of the directive is to protect freedom of movement for goods by means of preventive control and that the obligation to notify is essential for achieving such Community control."²⁰² The Court held that the breach of the obligation to notify constitutes a "substantial procedural defect" rendering the technical regulation inapplicable to individuals. National courts must therefore decline to apply a technical regulation that has not been properly notified.²⁰³

Expansion of EC Environmental Law

European Economic Area

The Agreement on the European Economic Area (EEA)²⁰⁴ expands the common market of the European Community to European Free Trade Area (EFTA) countries, namely Iceland, Liechtenstein, and Norway. This section of the Article examines the EEA Agreement's environmental law implications. It begins with a description of the EEA's structure, including its institutions and fundamental legal principles. It then summarizes the Agreement's environmental provisions and explains their effect.

[28 ELR 10497]

EEA Structure

The EEA seeks to extend to EFTA states the common market of the EC, without the full integration of EFTA states into the EC legislative process. Membership in the EEA requires EFTA states to accept EC principles and jurisprudence on the "four freedoms" (the free movement of goods, services, capital, and persons) and to implement a broad range of existing EC legislation that is specifically incorporated through annexes to the Agreement. It further sets up a system for the adoption of future EC legislation in the EEA through amendments to the Agreement's annexes.

[] Institutions. The EEA Council is the EEA's highest political institution. It consists of (a) members of the EC Council (i.e., representatives of EC member states), (b) members of the European Commission, and (c) one member of each EFTA government. It is "responsible for giving the political impetus in the implementation of this Agreement and in laying down general guidelines for the EEA Joint Committee."²⁰⁵ It is also responsible for making "the political decisions leading to amendments of the Agreement."²⁰⁶ That is, it is responsible for making any changes to the Agreement itself, as distinct from changes to the Agreement's detailed annexes. These decisions to amend the Agreement are to be made "by agreement between the Community, on the one hand, and the EFTA States, on the other."²⁰⁷ The EEA Presidency is held alternately, for six-month periods, by an EC member state and an EFTA state, and the EEA Council meets at least twice a year.

The EEA Joint Committee is the EEA's legislative workhorse, and it is to "ensure the effective implementation and operation of this Agreement."²⁰⁸ More specifically, it is to incorporate new EC legislation and amendments to existing legislation into the Agreement's annexes and protocols, thereby obliging EFTA states to implement the new EC legislation. The EEA Joint Committee is to make decisions "by agreement between the Community, on the one hand, and the EFTA States speaking with one voice, on the other."²⁰⁹ The EEA Joint Committee Presidency is held alternately, for six-month periods, by (a) the EC Commission, and (b) one of the EFTA states.

The Agreement sets out the procedure by which the EC is to consider views of EFTA states in its law making and by which the EEA Joint Committee may amend the Agreement's annexes and certain of the protocols.²¹⁰ Broadly speaking, the Commission is to consult with the national experts of EFTA states, as it does currently with the experts of EC states, prior to the transmittal to the EC Council of a proposal. In transmitting such a proposal to the EC Council, the Commission must also transmit a copy to the Joint Committee (and hence to EFTA states). The EC is to consider EFTA state views in adopting legislation.

Once the EC has adopted legislation, the Joint Committee is to make a decision "concerning the amendment of an Annex … as closely as possible to the adoption by the Community of the corresponding new Community legislation with a view to permitting a simultaneous application of the latter as well as of the amendments of the Annexes …."²¹¹ If the Joint Committee cannot reach agreement on the amendment to an annex, it shall examine "all further possibilities to maintain the good functioning of this Agreement and take any decision necessary to this effect, including the possibility to take notice of the equivalence of legislation."²¹² If an agreement is still not reached within a prescribed time period, the affected part of the Agreement's annex is suspended until an agreement is reached.

This decisionmaking procedure appears at first glance to provide EFTA states with an important legislative role. However, EFTA states are inevitably junior partners in the legislative process. At the EC, they are able to comment, but are not able to vote on proposals. Once proposals are adopted by the EC, EFTA states are confronted with proposed amendments to the Agreement's annexes to include the new EC legislation in EEA law. The decision on whether to adopt a proposed amendment is to be made by agreement between the EC on one side and EFTA states on the other. In short, individual EFTA states will have little say. Further, the Commission, in representing the EC in this process, is typically insistent that EC law is an all-or-nothing proposition.

The EFTA Surveillance Authority is the analogue for EFTA states of the EC's Commission and is hence of central importance to effective implementation of EEA law in EFTA states. Specifically, the Agreement provides that EFTA states are to establish an EFTA Surveillance Authority, as well as "procedures similar to those existing in the Community including procedures for ensuring the fulfillment of obligations under this Agreement and for control of the legality of acts of the EFTA Surveillance Authority regarding competition."²¹³

In parallel to the European Court of Justice, the EFTA Court is competent for (1) actions concerning the surveillance procedure regarding EFTA states, (2) appeals regarding competition-law decisions of the EFTA Surveillance Authority, and (3) disputes between EFTA states. Having two courts rendering opinions on the meaning of the EEA Agreement and on the terms of EC law obviously creates a risk of divergent interpretations.²¹⁴ The Agreement provides that, in order to ensure the uniform interpretation of the Agreement's provisions and those of EC legislation "which are substantially reproduced" in the Agreement, the Joint Committee shall review judgments of the European Court of Justice and the EFTA Court.²¹⁵ If the Joint Committee is not able to ensure the "homogeneous interpretation of the Agreement," the Agreement's dispute resolution provision²¹⁶ applies.²¹⁷

[28 ELR 10498]

[] Basic EEA Principles. As with the EC Treaty, the Agreement creates a general obligation on parties to "take all appropriate measures, whether general or particular, to ensure the fulfillment of the obligations of this Agreement" and to "abstain from any measure which could jeopardize the attainment of the objectives of this Agreement."²¹⁸ This latter provision could arguably preclude an EFTA state from adopting legislation on a matter that is concurrently the subject of a proposal before the EC Council or the EEA Joint Committee.

Also, the Agreement effectively incorporates the corpus of the European Court of Justice jurisprudence into EEA law. The Agreement states that its provisions shall, "in their implementation and application, be interpreted in conformity with the relevant rulings of the Court of Justice …."²¹⁹ Thus, EEA Agreement provisions paralleling EC Treaty provisions have to be construed by the Court of Justice, the EFTA Court, and national courts in accordance with the Court of Justice's jurisprudence (e.g., the free movement of goods principles). This provision apparently also results in the incorporation of the Court of Justice's interpretations of EC legislation where that legislation is specifically incorporated into EEA law.

The Agreement provides that the "[f]ree movement of goods between the Contracting Parties shall be established in conformity with the provisions of this Agreement."²²⁰ The Agreement then, like the EC Treaty, sets forth more specific provisions aimed at achieving this objective. Articles 11 and 12 of the Agreement prohibit quantitative restrictions and "all measures having equivalent effect" on imports and exports between contracting parties (i.e., between EEA members). These provisions mirror the EC Treaty's Articles 30 and 34. The Agreement's Article 13, on the other hand, allows such quantitative restrictions on imports and exports "justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; [etc.]."²²¹ Such prohibitions or restrictions, however, may not constitute a means of "arbitrary discrimination or a disguised restriction on trade between the Contracting Parties."²²² This Article 13 of the Agreement repeats verbatim the EC Treaty's Article 36.

The Agreement prohibits, in Article 10, customs duties (and charges having equivalent effect) on imports and exports between contracting parties. The Agreement then, in Article 14, copies the EC Treaty's Article 95 on taxes. That provision of the Agreement (1) prohibits parties from imposing, "directly or indirectly," on the products of other parties "any internal taxation of any kind in excess of that imposed directly or indirectly on similar domestic products," and (2) specifies that no party may impose on products of other parties "any internal taxation of such a nature as to afford indirect protection to other products."²²³

Accordingly, when EFTA states seek to adopt laws affecting the free movement of goods, those national measures may be subject to challenge before the EFTA Court (or possibly national courts)²²⁴ for infringement of the free movement principles. Thus, it may turn out that certain national measures (e.g., a used-product take-back scheme or an eco-tax) may be vulnerable to attack because of their impact on the EEA common market.

[] Latitude to Adopt Inconsistent Legislation. It should be noted that the Agreement provides that it:

[D]oes not prejudge the right of each Contracting Party to amend, without prejudice to the principle of nondiscrimination and after having informed the other Contracting Parties, its internal legislation in areas covered by this Agreement … if the EEA Joint Committee concludes that the legislation as amended does not affect the good functioning of this Agreement.²²⁵

It is difficult to assess the practical implications of this provision, as it appears that the Joint Committee could long-term sanction the adoption of any EFTA country's legislation, no matter how pernicious for the free movement of goods and services, so long as the parties formally agree that the legislation "does not affect the good functioning of the Agreement."²²⁶ Presumably the parties would usually not agree to measures detrimentally affecting the common market, as the producers of the various parties would likely be harmed by such measures. Also, there would remain the prospect of a legal challenge to national measures affecting the "good functioning of the Agreement." Such a challenge could presumably be based on free movement and nondiscrimination principles. But one can only wonder how rigorous the scrutiny of the European Court of Justice or EFTA Court would be in such a case, in light of the Joint Committee's imprimatur.

[] Supremacy of EEA Law. Protocol 35 provides that EEA rules take priority over national law in EFTA states. This protocol notes in its preamble that (1) "this Agreement aims at achieving a homogeneous European Economic Area, based on common rules, without requiring any Contracting Party to transfer legislative powers to any institution of the European Economic Area"; and (2) "this consequently will have to be achieved through national procedures." The protocol then states: "For cases of possible conflicts between implemented EEA rules and other statutory provisions, the EFTA States shall undertake to introduce, if necessary, a statutory provision to the effect that EEA rules prevail in these cases."²²⁷

[28 ELR 10499]

Environmental Legislation

The Agreement obliges EFTA states to incorporate a broad range of existing EC environmental law into their national law and requires incorporation of future enactments. The means by which this is done varies. As a consequence, the effect on the EFTA states' ability to adopt stricter requirements, which may affect the free movement of goods and services, also varies.

[] Free Movement of Goods. Specific provisions regarding the free movement of goods are set out in protocols and annexes to the Agreement. In particular, much of the EC's legislation on technical regulations, standards, testing, and certification is incorporated in the Agreement through Protocol 12 and Annex II. These provisions are to apply to all products, unless otherwise specified.

Among the so-called technical regulations are some important environmental measures, most particularly the EC's chemical legislation. Annex II sets out the full range of the chemical and other dangerous substances legislation and specifies for each piece of legislation the schedule for incorporation into the EFTA states' national law, conditions under which EFTA states may continue to apply or adopt inconsistent measures, and periods for review of implementation. For example, Directive 67/548 on the Classification, Packaging, and Labeling of Dangerous Substances,²²⁸ as amended, as well as Directive 88/379 on the Classification, Packaging, and Labeling of Dangerous Preparations,²²⁹ applied in the EEA as of 1995.²³⁰

Among the directives included in the technical regulation provisions is the seemingly innocuous, but quite important, Directive 83/189 Laying Down a Procedure for the Provision of Information in the Field of Technical Standards and Regulations.²³¹ Under Annex II, this directive applies to EFTA states.²³² If for no other reason than the delays it imposes on the implementation of covered legislation, and the (largely informal) opportunity afforded for interested parties to comment, this directive could have a significant effect on EFTA states when they seek to adopt environmental legislation that affects the free movement of goods and services (e.g., packaging and packaging waste legislation, or used-product take-back laws).

[] Environmental Law in the Context of the "Four Free-doms." The Agreement sets forth the EEA's environmental objectives in Article 73 (e.g., "to preserve, protect and improve the quality of the environment"). In Article 74, it provides that "Annex XX contains the specific provisions on protective measures which shall apply pursuant to Article 73." Annex XX then sets out a broad range of environmental measures, relating to air, water, waste, etc., which EFTA states must incorporate into their national legal systems. That is, the annex specifies particular EC directives and implementation dates. EFTA states must then transpose EC directives and regulations by the dates indicated. The Agreement goes on to provide in Article 75, however, that "[t]he protective measures referred to in Article 74 shall not prevent any Contracting Party from maintaining or introducing more stringent measures compatible with this Agreement." So, EFTA states are obliged to implement the directives listed in Annex XX as minimum requirements, but may, if they so choose, impose stricter or more comprehensive "protective measures," at least so long as those measures are "compatible with this Agreement."²³³

[] Environmental Law Outside the "Four Freedoms." The Agreement provides for the parties to "strengthen and broaden cooperation in the framework of the Community's activities in the fields of: research and development, … the environment, … social policy, consumer protection, … in so far as these matters are not regulated under the provisions of other parts of this Agreement."²³⁴ Such cooperation shall normally take the form of:

* participation by EFTA states in EC framework or specific programs, or projects;

* establishment of joint activities;

* "parallel legislation, where appropriate, of identical or similar content"; and

* "coordination, where this is of mutual interest, of efforts and activities via, or in the context of, international organizations, and of cooperation with third countries."²³⁵

With specific regard to the environment, cooperation is to be strengthened in the framework of the Community's activities, in particular regarding:

* policy and action programs on the environment;

* integration of environmental protection requirements into other policies;

* economic and fiscal instruments;

* environmental questions which have transboundary implications; and

* major regional and global topics under discussion within international organizations.²³⁶

Where it has been decided by the Joint Committee that co-operation shall take the form of parallel legislation, the Joint Committee decisionmaking procedures described above shall apply.

Accession Countries

In July 1997, Commission President Jacques Santer announced "Agenda 2000 — For a Stronger and Wider Union,"²³⁷ in which the Commission published its recommendations on applicant countries with which the EC should commence accession negotiations and a strategy for bringing those countries within the common market. The Commission recommended that the EC begin negotiations with [28 ELR 10500] Estonia, Hungary, Poland, Slovenia, and the Czech Republic (the Council had already decided to start talks with Cyprus). In March 1998, the EU formally commenced accession negotiations with these countries.²³⁸ Applications by other Central European countries (e.g., Bulgaria, Lithuania, or Slovakia) are to be revisited yearly, according to the Commission. This section reviews the Commission's plans for ensuring the extension of EC environmental law to applicant countries.

After considering prospects of applicants, the Commission discussed the impact of enlargement on the EU's "current policies and their future development."²³⁹ In addition to reviewing such sensitive subjects as the Common Agricultural Policy and other subsidy schemes (e.g., Cohesion Policy), the Commission comments on the effect on "implementing environmental standards."²⁴⁰ The Commission opines that "while adoption of the Union's environmental rules and standards is essential, none of the candidate countries can be expected to comply fully with the acquis in the near future, given their present environmental problems and the need for massive investments."²⁴¹ The Commission continues, "[t]he persistence of a gap between levels of environmental protection in present and new members would distort the functioning of the Single Market and could lead to a protectionist reaction."²⁴² However, compliance with EC environmental standards would require, "apart from important legislative and administrative efforts, massive investment in the ten applicant countries," and neither applicants nor the EC would be able to cover these costs.²⁴³ To solve this tension, the Commission proposes a "two-fold approach":

* Realistic national long-term strategies for gradual effective alignment should be drawn up and start being implemented in all applicant countries before accession, in particular tackling air and water pollution. These strategies should identify key priority areas and objectives to be fulfilled by the dates of accession as well as timetables for further compliance; ensuing obligations should be incorporated in the accession treaties. All new investments should comply with the acquis.

* Important domestic and foreign financial resources, in particular from the private sector, will have to be mobilised in support of these strategies.²⁴⁴

In light of these considerations, the Commission argues that the enlargement strategy should focus on two elements:

* "Reinforcing the institutional and administrative capacity of the applicant countries ('institution-building')."²⁴⁵ The Commission explains that its "[e]fforts will focus on training specialists in [inter alia] law, … environment, … phytosanitary inspections, technical controls, … etc."²⁴⁶

* "Bringing enterprises into line with Community standards." The Commission argues that "[a]doption of the Community acquis implies the imposition by applicant countries, as swiftly as possible, of Community standards on enterprises and large industrial plants."²⁴⁷ This is primarily the case with such regulations as those on environment and working conditions.

In pursuing these two goals, the Commission intends to use (1) Accession Partnerships, (2) existing bilateral Europe Agreements, and (3) other existing EC machinery for dealing with the acquis.

[] Accession Partnerships. Accession Partnerships will be a new instrument, presumably in the form of bilateral agreements between the EU and the several applicant countries. These Accession Partnerships will involve:

* precise commitments on the part of the applicant country, relating in particular to … a national programme for adopting the Community acquis within a precise timetable; and²⁴⁸

* mobilisation of all resources available to the Community for preparing the applicant countries for accession [(e.g., the Phare subsidy program)].²⁴⁹

[] Europe Agreements. Europe Agreements (also called association agreements), the bilateral treaties agreed to in the early 1990s between the EU and individual countries, will continue to apply. These treaties create vague international law obligations on Central European countries to transpose EC environmental and other law over approximately 10 years. The association subcommittees set up under these treaties for monitoring "progress on approximation of laws and the exchange of information on the evolution of the acquis," will continue to operate.²⁵⁰

[] Participation in Community Programs and Machinery. The EU will increase assistance with regard to "approximation of laws," including the following.

* The Technical Assistance Information Exchange Office (TAIEX), created to assist Central European countries with internal market integration, will be reinforced with regard to "assistance for the approximation of laws." TAIEX is to provide information on all EC law "(in particular on the environment and transport) and should broaden the scope of its activities in the applicant countries, not only as regards governments but also firms, [28 ELR 10501] in order to prepare them for the disciplines of the single market."²⁵¹

* Accession countries will be invited to participate in EC "machinery" for administrative cooperation and application of EC law.²⁵² These activities would include participation by Central European countries in such influential groups as IMPEL, the network of senior national environmental enforcement officials, and the analogue in the occupational health and safety area.

The Commission's "Agenda 2000" sets out an ambitious program for extending the scope of EC law (including especially environmental law) to Central Europe. The Commission is insistent that all EC environmental law should apply as soon as possible, and not just EC product regulation. This is, to be sure, a questionable proposition. Clearly it would be important to transpose product regulations (e.g., product safety standards) essential to the free movement of goods across the EC.

But it is not so clear that environmental permitting rules and those air and water quality rules dealing essentially with local matters should be extended right away. For example, Czechs and Dutch, with differing levels of prosperity, may well have different priorities, and Czechs might reasonably accept sootier local air quality for the sake of fostering industrial development and wealth creation. While many Western European manufacturers and labor unions hanker for a "level playing field," it is not certain that mandating implementation right away of rules promulgated for a wealthier Western Europe is in the best interest of Central Europeans.

In any event, while the Commission document does seem to recognize the need for limited phase-in periods for some existing Central European industrial facilities, the Commission specifically states that "[a]ll new investments should comply with [EC environmental law]."²⁵³ It is not clear if the Commission means to include in "new investments" merely newly constructed (or modified) industrial facilities, or if it intends to suggest that when a foreign firm invests in (i.e., acquires) a Central European company, that company must then comply with EC environmental standards.

Quite apart from accelerated transposition of EC law in accession countries, the Commission intends to devote resources to bolstering the Central European bureaucracies. Training and information exchange could be important, but it may well be the participation of Central Europeans in groups such as IMPEL that will have the greatest practical effects. This group of senior inspectors already plays an important, if little noticed, role in fostering cooperation (e.g., on waste shipment enforcement) and "benchmarking" between national enforcement officials in the EC. In that regard, the Commission launched in May 1998 an informal network for the implementation and enforcement of environmental law called the ACIMPEL, which brings together national officials dealing with the implementation of environmental legislation in the accession countries. The group will work in close cooperation with IMPEL.²⁵⁴

[] Conclusion. To conclude, although under Association Agreements, Central European countries have had, since the early 1990s, obligations to transpose EC environmental and other law, the pace and seriousness of that "harmonization" effort will now increase. The Commission has set ambitious goals for extending environmental regulation to accession countries, even in advance of actual accession. To-gether with initiatives aimed at "institution-building" and administrative cooperation, these accession policies promise to alter the regulatory and enforcement environment for companies doing business in Central Europe.

1. Treaty Establishing the European Economic Community, Mar. 25, 1957, 298 U.N.T.S. 3 [hereinafter EC Treaty].

On October 2, 1997, member states signed the Treaty of Amsterdam to amend the Treaty on European Union and the treaties establishing the European Communities. The Amsterdam Treaty will, once ratified by all member states, amend the following provisions of the Treaty of Rome concerning environmental law:

. Legislative procedure. EC environmental legislation will have to be adopted using the co-decision procedure instead of the cooperation procedure, thereby increasing the role of the European Parliament.

. Environmental guarantee. Member states may introduce new, more stringent legislation than a Community harmonizing measure, in order to protect the environment. Member states have to notify the Commission of the envisaged legislation, and the Commission has six months to evaluate whether it constitutes a means of arbitrary discrimination or a disguised restriction on trade. Unless the Commission rejects the provisions concerned, the national rules may become law.

2. Treaty on European Union, Feb. 7, 1992, 31 I.L.M. 247 (also called the Maastricht Treaty).

3. Article 155 of the EC Treaty provides that the Commission is to

. ensure that the provisions of this Treaty and the measures taken by the institutions pursuant thereto are applied;

. formulate recommendations or deliver opinions on matters dealt with in this Treaty, if it expressly so provides or if the Commission considers it necessary;

. have its own power of decision and participate in the shaping of measures taken by the Council and by the European Parliament in the manner provided for in this Treaty; and

. exercise the powers conferred on it by the Council for the implementation of the rules laid down by the latter.

EC Treaty, supra note 1, art. 155.

4. Id. art. 145.

5. See infra notes 11-19 and accompanying text for a discussion of the different legislative procedures and the role of the European Parliament.

6. See EC Treaty, supra note 1, arts. 169 (Treaty infringement procedures against a member state brought by the Commission), 170 (Treaty infringement procedures against a member state brought by another member state), 171 (noncompliance actions against a member state), 173 (actions challenging the competence of Community institutions to act), and 177 (preliminary rulings on Community law at the request of national courts).

The Community created in 1988 the Court of First Instance to deal with the burgeoning caseload of the Court of Justice. See id. art. 168a and Council Decision 88/591 of 25 November 1988 Establishing a Court of First Instance of the European Communities, 1988 O.J. (L 319) 1, as amended by Council Decision 93/350, 1993 O.J. (L 144). The Court of First Instance, which consists of 15 judges and sits in chambers of 3 and 5 judges, hears (a) cases involving employment issues between Community institutions and their servants and (b) all actions brought by private individuals against Community acts of direct and individual concern to them. EC Treaty, supra note 1, art. 3. Appeals are to the Court of Justice on points of law.

7. EC Treaty, supra note 1, arts. 165-66.

8. Id. It has been explained that:

The function of the Advocates-General is modeled on that of the commissaire du gouvernement in the French Conseil d'E-tat. The task of the Advocates-General is of great importance, particularly as their impartial submissions on law and on the facts form an extremely valuable basis on which the Court … can arrive at its judgment.

PAUL KAPTEYN & PIETER VERLOREN VAN THEMAAT, INTRODUCTION TO THE LAW OF THE EUROPEAN COMMUNITIES 145-46 (2d ed. 1989); see also Takis Trimidas, The Role of the Advocate-General in the Development of Community Law: Some Reflections, 34 COMMON MKT. L. REV. 1349 (1997) (arguing that "the influence of the advocate-general in the development of community law exceeds by far the contribution of the opinion to finding a solution to the specific dispute").

9. EC Treaty, supra note 1, art. 167. See Rod Hunter, Why Blame [Lux-embourg] for Brussel's Decisions?, WALL ST. J. EUR., Mar. 12, 1996, at 8 (commenting on the Court's procedures and proposing reforms).

10. Id. art. 171. While this provision, added by the 1992 Treaty on European Union (Maastricht Treaty), has provoked much discussion, one might question its real importance given that there is little the Court or Commission can do to force a recalcitrant member state to pay a penalty. See Rod Hunter, The EU's Great and Radical Vice, WALL ST. J. EUR., Aug. 18-19, 1995, at 6.

11. See Alan Dashwood, Community Legislative Procedures in the Era of the Treaty on European Union, 19 EUR. L. REV. 343 (1994).

12. See, e.g., EC Treaty, supra note 1, arts. 43, 54, 75(3), 99, 100, 130s(2), 235.

13. See, e.g., id. art. 6, 75, 104a, 104b, 127(4), 130s(1), 130w.

14. See id. art. 189c.

15. See id. art. 189b.

16. Harmonization measures are laws designed to remove the nontariff trade barriers created by inconsistent national standards, the ultimate justification of these laws being the opening of the Community's common market.

17. See EC Treaty, supra note 1, art. 189b (describing the co-decision procedure).

18. If, within three months, the Council approves all the Parliament's amendments, the Council shall amend its common position accordingly and adopt the act in question.

19. See EC Treaty, supra note 1, art. 189b(6).

20. See Kieran Bradley, The European Court and the Legal Basis of Community Legislation, 13 EUR. L. REV. 379 (1988); Nicholas Emilou, Opening Pandora's Box: The Legal Basis of Community Measures Before the Court of Justice, 19 EUR, L. REV. 489 (1994).

21. Case 300/89, Commission v. Council, 1991 E.C.R. I-2867.

22. Id. at I-2898.

23. Id. at I-2899.

24. Id. at I-2900.

25. Id. at I-2901.

26. Ulrich Everling, Abgrenzung der Rechtsangleichung zur Verwirklichung des Binnenmarktes nach Art. 100A EWGV durch den Gericht-shof, 26 EUROPARECHT 179 (1991); see also DERRICK WYATT & ALAN DASHWOOD, EUROPEAN COMMUNITY LAW 371 (3d ed. 1993).

27. Council Directive 91/156 Amending Directive 75/442 on Waste, 1991 O.J. (L 78) 32.

28. Case C-155/91, Commission v. Council, 1993 E.C.R. I-939.

29. Id. at I-967.

30. 1993 O.J. (L 30) 1.

31. Case C-187/93, European Parliament v. Council, 1994 E.C.R. I-2857.

32. Id. at I-2882.

33. See Rod Hunter, Prising Open the Club Doors, EUR. VOICE, Jan. 18, 1996, at 14 (criticizing these delegated rulemaking procedures and suggesting reforms involving the creation of a more open notice and comment procedure and more vigorous judicial review).

34. Council Directive 91/689 on Hazardous Waste, 1991 O.J. (L 337) 20.

35. Id. art. 1(4); Council Decision 94/904 Establishing a List of Hazardous Waste Pursuant to Article 1(4) of Directive 91/689 on Hazardous Waste, 1994 O.J. (L 356) 14. See Rod Hunter, The Problematic EU Waste List, 4 EUR, ENVTL. L. REV. 83 (1995) (discussing the hazardous waste list adopted pursuant to this directive, the failure of EC institutions to comply with EC law, and the consequential legal vulnerability of the list).

36. Modus Vivendi of 20 December 1994 Between the European Parliament, the Council, and the Commission Concerning the Implementing Measures for Acts Adopted in Accordance with the Procedure Laid Down in Article 189b of the EC Treaty, 1996 O.J. (C 102) 1.

37. Completing the Internal Market: White Paper from the Commission to the European Council, COM(85)310 final.

38. Council Directive 88/378 of 3 May 1988 on the Approximation of the Laws of the Member States Concerning the Safety of Toys, 1988 O.J. (L 187) 1, Amended by Council Directive 93/68 of July 22, 1993, 1993 O.J. (L 220) 1.

39. European Parliament and Council Directive 94/62 on Packaging and Packaging Waste, arts. 9 & 10 and Annex II, 1994 O.J. (L 365) 10.

40. The Community also adopts decisions, which set out rulings specific to particular member states, companies, and individuals and are binding on those to whom they are addressed. Further, the Community uses recommendations and opinions for nonbinding Community views, often as a means of encouraging throughout the Community conduct thought to be desirable. See EC Treaty, supra note 1, art. 189.

41. Id. art. 189 ("A regulation shall have general application. It shall be binding in its entirety and directly applicable in all Member States."). As a practical matter, some national measures may nonetheless be necessary to achieve effective implementation of a regulation, much as administrative regulations often need to be promulgated at the federal level in the United States to give effect to laws passed by the U.S. Congress.

42. Case 43/71, Politi SAS v. Ministry of Finance of the Italian Republic, 1971 E.C.R. 1039, 1048.

43. See SACHA PRECHAL, DIRECTIVES IN EUROPEAN COMMUNITY LAW: A STUDY ON EC DIRECTIVES AND THEIR ENFORCEMENT BY NATIONAL COURTS 86 (1995).

44. See generally Rolf Wagenbaur, The European Community's Policy on Implementation of Environmental Directives, 14 FORDHAM INT'L L.J. 455, 456-61 (1991).

Member states, in many instances, have sought to justify a failure to implement on the grounds of constitutional (e.g., national government claiming that it lacks jurisdiction), political (e.g., parliamentary crises preventing adoption of necessary laws), or economic reasons. The Court has consistently rejected these justifications. See, e.g., Case 290/89, Commission v. Belgium, 1991 E.C.R. I-2851 (stating that Belgium could not, because of internal constitutional or economic problems, avoid its obligations to implement Directives 75/440 on the Quality Required of Surface Water Intended for the Abstraction of Drinking Water and 79/869 on Methods of Measurements and Frequencies of Sampling and Analysis of Surface Water Intended for the Abstraction of Drinking Water); Cases 227 to 230/85, Commission v. Belgium, 1988 E.C.R. 1, 11; Case C-45/91, Commission v. Greece, 1992 E.C.R. I-2509.

45. Case 102/79, Commission v. Belgium, 1980 E.C.R. 1473 (condemning Belgium for failing to implement 12 different directives).

46. Id. at 1486.

47. Id.; see also Case 96/81, Commission v. Netherlands, 1982 E.C.R. 1791, 1804-05; Case 97/81, Commission v. Netherlands, 1982 E.C.R. 1819, 1833; Case 361/88, Commission v. Germany, 1991 E.C.R. I-2567 (declaring that implementation of a directive by way of an administrative circular, which was in itself not obligatory and which could be varied at anytime and in individual cases, was not sufficient); Case 59/89, Commission v. Germany, 1991 E.C.R. I-2607 (same).

48. Article 189 of the EC Treaty specifically states that directives are "binding" on the member states. EC Treaty, supra note 1, art. 189.

49. Case 148/78, 1979 E.C.R. 1629.

50. Id. at 1642. In Ratti, Tullio Ratti, who had labeled certain dangerous substances in accordance with the requirements of Community directives, was prosecuted by the Italian government for failing to comply with conflicting Italian legislation. The Court held that Ratti could rely on the Community law in the prosecution against him and that Italy could not apply conflicting national law.

51. See, e.g., Case 152/84, Marshall v. Southampton & South-West Hampshire Area Health Auth., 1986 E.C.R. 723, 748 (discussed infra at note 67 and accompanying text).

52. Case C-236/92, Comitato de Coordinamento per la Diffesa della Cava v. Regione Lombardia, 1994 E.C.R. I-484.

53. Id. at I-502.

54. Case 148/78, 1979 E.C.R. at 1651. However, as a legal advisor of the Commission's Legal Services has noted:

Notwithstanding national courts' tendency to recognize a directive's direct effects — with the sole exception of the French Conseil d'Etat — direct effect is not yet taken seriously by a number of administrative bodies in Member States. The direct effect of environmental protection directives has meant little practical improvement in their enforcement.

Wagenbaur, supra note 44, at 458.

55. Case 8/81, 1982 E.C.R. 53.

56. 1977 O.J. (L 145) 1, as amended by Council Directive 78/583 on the Harmonization of the Laws of the Member States Relating to Turn-over Taxes, 1978 O.J. (L 194) 16 (extending from January 1, 1978, until January 1, 1979, the deadline for implementation).

57. Id. art. 13B(d)(1).

58. Case 8/81, 1982 E.C.R. at 71.

59. Id. at 73.

60. Id.

61. Council Directive 85/337 on the Assessment of the Effects of Certain Public and Private Projects on the Environment, 1985 O.J. (L 175) 40.

62. Id. art. 4(2). ("To this end Member States may inter alia specify certain types of projects as being subject to an assessment or may establish the criteria and/or thresholds necessary to determine which of the projects of the classes listed in Annex II are to be subject to an assessment …."). Council Directive 97/11 amending Directive 85/337 provides that member states shall determine through (a) a case-by-case examination, or (b) thresholds or criteria set by the member state whether an Annex II project shall be made subject to an impact assessment. Council Directive 97/11, 1997 O.J. (L 73) 5. The amendment probably does not affect the direct effectiveness of that provision.

63. Case C-72/95, Kraaijenveld v. Gedeputeerde Staten van Zuid-Holland, 1996 E.C.R. I-5431, I-5450.

64. Council Directive 75/442 on Waste, 1975 O.J. (L 194) 39.

65. Case C-236/92, Comitato de Coordinamento per la Diffesa della Cava v. Regione Lombardia, 1994 E.C.R. I-484.

66. Id. at I-502.

67. See Case 152/84, Marshall v. Southampton & South-West Hampshire Area Health Auth., 1986 E.C.R. 723, 748-49; Case 148/78, Pubblico Ministero v. Ratti, 1979 E.C.R. 1629; Case 102/79, Commission v. Belgium, 1980 E.C.R. 1473, 1487.

68. Case 152/84, 1986 E.C.R. 723. In Marshall, Ms. M.H. Marshall had been dismissed after her 62d birthday pursuant to the Authority's general policy, which provided that women would be dismissed after 60 when they became eligible for a pension and men at 65 when they became eligible for a pension. Ms. Marshall asserted that her dismissal at 62 was in violation of Directive 76/207 on the Implementation of the Principle of Equal Treatment for Men and Women as Regards Access to Employment, Vocational Training, Promotion, and Working Conditions, 1976 O.J. (L 39) 40, and that the provisions of the directive were directly applicable. The Authority and the British government argued, inter alia, that a directive can never impose obligations directly on individuals and that it can only have direct effect against a member state qua public authority and not against a member state qua employer. As an employer, so the argument ran, a state is no different from a private individual. The Court conceded that indeed "a directive may not of itself impose obligations on an individual and that a provision of a directive may not be relied upon as such against a person." Case 152/84, 1986 E.C.R. at 749. But the Court went on to state that the capacity in which a member state was acting made no difference and that "where a person involved in legal proceedings is able to rely on a directive as against the State he may do so regardless of the capacity in which the latter is acting, whether employer or public authority." Id. The Court then concluded that Article 5, Paragraph 1 of the directive, which prohibits any discrimination on the grounds of sex with regard to working conditions, including conditions governing dismissal, was directly applicable and could be relied on to avoid the application of non-conforming national provisions. Id. at 750.

69. Case 152/84, 1986 E.C.R. at 749. The Court has been offered several opportunities to reconsider its position. Influential advocatesgeneral, such as Van Gerven and Jacobs, have argued in favor of direct effect of directives among private individuals and urged the Court to abolish its distinction between horizontal and vertical direct effects. Case C-271/91, Marshall v. Southampton & South-West Hampshire Area Health Auth., 1993 E.C.R. I-4367; Case 316/93, Vaneetveld v. Le Foyer SA, 1994 E.C.R. I-763. They pointed out that the impossibility to invoke unimplemented directives against individuals could lead to unequitable results. Had Ms. Marshall been employed by a private hospital, rather than by a public one, she would not have been able to rely on Directive 76/207. The Court, however, has firmly declined the invitations to reconsider its case law. The Court ruled in Faccini Dori v. Recreb Srl. that:

[T]he effect of extending that case law (recognizing that directives can have vertical direct effects) to the sphere of relations between individuals would be to recognize a power in the Community to enact obligations for individuals with immediate effect, whereas it has competence to do so only where it is empowered to adopt regulations.

See Case C-91/92, Faccini Dori v. Recreb Srl., 1994 E.C.R. I-3325; Case C-168/95, Criminal Proceedings Against Luciano Arcaro, 1996 E.C.R. I-4705. For a critical comment, see Jason Coppel, Rights, Duties, and the End of Marshall, 57 MOD. L. REV. 859 (1994); Takis Trimidas, Horizontal Effect of Directives: A Missed Opportunity, 19 EUR. L. REV. 621 (1994).

70. Council Directive 76/464 on Pollution Caused by Certain Dangerous Substances Discharged into the Aquatic Environment of the Community, 1976 O.J. (L 129) 23.

71. Council of State, Judgment of 25 September 1992, Milieu en Recht 46 (1992).

72. Council Directive 76/207 on the Implementation of the Principle of Equal Treatment for Men and Women as Regards Access to Employment, Vocational Training, Promotion, and Working Conditions, 1976 O.J. (L 39) 40.

73. Case C-188/89, Foster v. British Gas, 1990 E.C.R. I-3313, I-3348.

74. However, it is not possible to invoke the direct effect of directives against "purely" private undertakings with no link to a governmental authority.

75. Case 103/88, Costanzo v. Commune di Milano, 1989 E.C.R. 1839 (local governmental administration obliged to apply a Community directive on public procurement in the place of conflicting Italian law); Case 148/78, Pubblico Ministero v. Ratti, 1979 E.C.R. 1629; Case 8/81, Becker v. Finanzamt Munster-Innenstadt, 1982 E.C.R. 53. Of particular importance in this line of jurisprudence is Case 103/88, 1989 E.C.R. at 1839. That case involved Directive 71/305 Concerning the Coordination of Procedures for the Award of Public Works Contracts, 1975 O.J. (L 185) 5, which provides certain requirements for public contracts to be awarded on the basis of the lowest price, except in specified circumstances. Id. art. 29. One of the circumstances is when the tender is "obviously abnormally low." Id. art. 29, para. 5. In such an instance the authority must examine the details of the tender and the tenderer may "furnish the necessary explanations." Id. Italian law, however, provided for a mathematical formula to determine when a tender was "abnormally low" and automatically excluded an abnormally low tender without providing a procedure for the tenderer to explain. A bid made by Costanzo under these Italian provisions was excluded because it was too low. Costanzo was not offered an opportunity to explain, and the Milan local authority awarded the contract to another, higher-priced bidder. Costanzo appealed the decision, arguing that the automatic exclusion provision of Italian law was in violation of Community law and that the Milan authority's decision should be set aside. The matter was brought before the Court of Justice for a preliminary ruling.

The Court ruled that the directive's provisions were sufficiently precise and unconditional to have direct effect, and a private party could rely on the directive, not just before national courts, but before all other state bodies, including local authorities. Conversely, all state bodies were obligated to apply the directive on their own initiative. In the Court's words, "administrative authorities, including municipal authorities, are under the same obligation as a national court to apply the provisions of … Directive 71/305/EEC and to refrain from applying provisions of national law which conflict with them." Case 103/88, 1989 E.C.R. at 1871.

76. Case C-106/89, Marleasing SA v. La Comercial Internacionales de Alimentacion SA, 1990 E.C.R. I-4156. Spain had failed to adjust its company law to Directive 68/151 on Company Law. Directive 68/151 on Co-ordination of Safeguards Which for the Protection of the Interests of Members and Others Are Required by Member States of Companies Within the Meaning of the Second Paragraph of Article 58 of the Treaty, With a View to Making Such Safeguards Equivalent Throughout the Community, 1969 O.J. (L 65) 8. The Court was asked whether a company's bylaws could be declared null and void on a ground that was not listed in the directive, which contained an exhaustive list of cases in which the nullity of a company's bylaws may be ordered, but which still figured in the existing Spanish company law. The Court decided that, by virtue of Article 5 of the Treaty, Spanish courts had to interpret existing Spanish law in the light of Community law and therefore had to take into consideration only the nullity grounds listed in the directive.

77. Case 21/78, Delkvist v. Anklagemyndigheden, 1978 E.C.R. 2327, 2338; Case 103/88, Costanzo v. Commune di Milano, 1989 E.C.R. 1839, 1871.

78. Case 103/88, 1989 E.C.R. 1839; see also Ludwig Kramer, The Implementation of Community Environmental Directives Within Member States: Some Implications of the Direct Effect Doctrine, 3 J. ENVTL. L. 39, 48 (1991). According to Dr. Ludwig Kramer, head of DG XI's Waste Unit, where such cases of damage to the interests of individuals occur, they must be settled in accordance with the principles of state liability, breach of official duty, etc.

79. 1980 O.J. (L 229) 30, amended by Council Directive 89/427, 1989 O.J. (L 201) 53. In Joined Cases 361/88 and C-59/89, Commission v. Germany, 1991 E.C.R. I-2567, the Court condemned Germany for failing to implement the directive by imposing general, legally binding standards ensuring compliance with the directive's mandatory air quality standards. The fact that ambient air quality met the directive's air quality standards in Germany was irrelevant. To satisfy the obligations under the directive, it is necessary to adopt precise, clear, and "transparent" legal requirements, so that individuals may know their rights and obligations.

80. Council Directive 80/779 on Air Quality Limit Values and Council Directive 82/884 on the Limit Value of Lead in Air, 1982 O.J. (L 378) 15.

81. Joined Cases 361/88 and C-59/89, 1991 E.C.R. I-2567, I-2603.

82. These standards could have a zoning-like implication affecting investment and expansion possibilities in a geographical area. If an area is already possessed of a number of industrial facilities that, pursuant to permits, emit sufficient pollutants to push the limits of the air quality standards, it may become impossible to get the emission permits necessary for a new facility or expansion of an existing facility.

83. Council Directive 85/337 on the Assessment of the Effects of Certain Public and Private Projects on the Environment, 1985 O.J. (L 175) 40.

84. 42 U.S.C. § 4321, ELR STAT. NEPA § 2.

85. Case C-72/95, Kraaijenveld v. Gedeputeerde Staten van Zuid-Holland, 1996 E.C.R. I-5431, I-5450.

86. Secretary of State for Transport v. Haughian, 2 C.M.L.R. 497, 507-08 (1997).

87. See Theo Drupsteen, Kolenvergassing op de Maasvlakte, 40 ARS AEQUI 576 (1991) (commenting on a decision of the president of the College van Beroep voor het Bedrijfsleven of 4 January 1991 annulling the Electricity Plan 1991-2000 of the Dutch Minister for Economic Affairs). The plan included the construction of a third power station in the valley of the Maas, one of the Netherlands' main rivers. The power station was to burn cokes. Texaco, which had argued in favor of a coke gasification plant, challenged the plan because this option was excluded, arguing that the minister failed to undertake an environmental impact assessment. The president of the College van Beroep voor het Bedrijfsleven, an administrative court, ruled that the project concerned a power station of more than 600 megawatts and should therefore have been subject to an environmental impact assessment. See also The Ruling of the President of the Administrative Litigation Section of the Dutch Council of State of 19 December 1991, 18 ARB 122 (1992). The Gedeputeerde Staten van Groningen, a provincial authority, granted a permit to extend a polymer plant and to build an incineration facility for Terephtaloyldichloride-waste. An environmental association challenged the decision to grant a permit because the applying company did not join an environmental impact assessment to its application. The Council of State ruled that Directive 85/337 had direct effect and that private interest groups could challenge an administrative decision to grant a permit without a required environmental impact assessment.

88. See, e.g., Case C-32/95 P, Greenpeace v. Commission (Apr. 2, 1998) (not yet reported) (dismissing an application for annulment of a Commission decision to grant Spain financial assistance from the European Regional Development Fund for the building of two power stations in the Canary Islands). The Court of Justice dismissed the action because the applicants lacked standing.

89. See infra notes 96-127 and accompanying section on Supervision of National Enforcement of Community Law.

90. Joined Cases C-6/90 and C-9/90, 1991 E.C.R. I-5357.

91. Council Directive 80/987/EEC of 20 October 1980 on the Approximation of the Laws of the Member States Relating to the Protection of Employees in the Event of the Insolvency of the Employer, 1980 O.J. (L 283) 23.

92. Joined Cases C-46/93 and C-48/93, Brasserie du Pecheur SA v. Bundesrepublik Deutschland and the Queen v. Secretary of State for Transport, 1996 E.C.R. I-1029.

93. See, e.g., Case C-392/93, The Queen v. H.M. Treasury, 1996 E.C.R. I-1631 (holding that an erroneous transposition of a provision of a Directive that was imprecisely worded cannot be regarded as a sufficiently serious breach of Community law).

94. Joined Cases C-178/94, C-179/94, C-188/94 and C-190/94, Dillenkofer v. Germany, 1996 E.C.R. I-4867, I-4880.

95. Case 26/62, Van Gend en Loos v. Nederlandse Administratie der Belastingen, 1963 E.C.R 1. In this historic case, the Court held for the first time that Community law differed from "ordinary" international law and could therefore have direct effect in the member states' legal order.

96. See EC Treaty, supra note 1, art. 5:

Member States shall take all appropriate measures, whether general or particular, to ensure fulfillment of the obligations arising out of this Treaty or resulting from action taken by the institutions of the Community. They shall facilitate the achievement of the Community's tasks. They shall abstain from any measure which could jeopardize the attainment of the objectives of this Treaty.

97. Though the EC Treaty imposes on member states the primary responsibility for implementing and enforcing Community legislation, Article 155 also requires the Commission to "ensure that the provisions of this Treaty and the measures taken by the institutions pursuant thereto are applied." Thus, it is the Commission's responsibility to monitor and ensure the application of the Community legislation.

98. EC Treaty, supra note 1, art. 169 (specifying infringement action procedure). The EC Treaty grants, in Article 170, a similar right of action to member states, but this right is rarely used. Member states find it more politic to leave infringement actions to the Commission and to avoid direct confrontation with other member states. But see Case 141/78, France v. United Kingdom, 1979 E.C.R. 2923 (holding that the United Kingdom's regulations on mesh size for fishing nets violated Community law).

99. Treaty on European Union, supra note 2, declaration 19 on the Implementation of Community Law.

100. See, e.g., Resolution on the Incorporation into National Law of Community Directives on the Improvement of the Quality of the Air, 1988 O.J. (C 94) 151; Resolution on the Implementation of European Community Legislation to Water, 1988 O.J. (C 94) 155; Resolution on Lead in Drinking Water, 1988 O.J. (C 94) 158; Resolution Concerning the Implementation in the Community of the Convention on International Trade in Endangered Species of Wild Fauna and Flora, 1988 O.J. (C 290) 142.

101. See, e.g., Seventh Annual Report to the European Parliament on Commission Monitoring of the Application of Community Law — 1989, 1990 O.J. (C 232) 1, 24-25; Twelfth Annual Report on Monitoring the Application of Community Law — 1994, 1995 O.J. (C 254) 1; Thirteenth Annual Report on Monitoring the Application of Community Law — 1995, 1996 O.J. (C 303)1; Communication from the Commission to the Council and the European Parliament Concerning the Application of Directives 75/439/EEC, 75/442/EEC, 78/319/EEC, and 86/278/EEC on Waste Management, COM(97)(23) final.

102. 23 Bulletin of the European Communities 18 (1990).

103. Eighth Annual Report to the European Parliament on Commission Monitoring of the Application of Community Law — 1990, 1991 O.J. (C 338) 1.

104. Id. at 220.

105. Id. The Commission discussed the failings of each of the member states in implementing and applying specific Community environmental directives. The discussions of countries such as Spain, Italy, and Greece produced the expected criticisms of failure to implement and apply completely the Community obligations, but also commented on the inadequacies of the bureaucratic structures assigned environmental responsibilities. Even Germany, which takes pride in the superiority of its environmental program, was criticized. The Commission noted delicately, "[b]ecause of its very detailed environmental legislation, the major concern of Germany is to modify that legislation the least possible when implementing Community directives. As a result, some important elements of Community directives are not entirely incorporated." Id. para. 41. The discussion of Germany proceeded to mention specific failures, such as, in the domain of waste, the German differentiation between recyclable wastes and nonrecyclable wastes, which does not accord with Community legislation and, in the area of nature protection, inadequacies in implementation of Community legislation on hunting and on special protection of zones for wild birds. Id.

106. To help overcome the difficulties encountered in supervising Community environmental law implementation, the Council adopted a directive rationalizing the reports of member states on the implementation of environmental directives. Directive 91/692 Standardizing and Rationalizing Reports on the Implementation of Certain Directives Relating to the Environment, 1990 O.J. (L 120) 1.

107. Implementing Community Environmental Law, COM(96)500 final at 2 [hereinafter Implementing Community Environmental Law].

108. Id.

109. See also Fourteenth Annual Report on Monitoring the Application of Community Law — 1996, 1997 O.J. (C 332) 102.

110. "The reasons for this are to be found in the multitude of infringements, the Commission's shortage of staff and money and the realization that the lengthy and cumbersome Article 169 [enforcement] procedure cannot systematically detect and eliminate all infringements of Community environmental Directives." Ludwig Kramer, Monitoring the Application of Community Directives on the Environment 8 (unpublished and undated manuscript) (on file with authors) [hereinafter Kramer, Monitoring the Application of Community Directives on the Environment].

111. Complaint to the Commission of the European Communities for Failure to Comply with Community Law, 1989 O.J. (C 26) 6 (standard complaint form issued by the Commission). A complaint need not be made out on the standard form, and it is sufficient that a complaint provide the Commission with enough information to identify issues and commence an investigation.

112. That provision provides:

If the Commission considers that a Member State has failed to fulfill an obligation under this Treaty, it shall deliver a reasoned opinion on the matter after giving the State concerned the opportunity to submit its observations.

If the State concerned does not comply with the opinion within the period laid down by the Commission, the latter may bring the matter before the Court of Justice.

EC Treaty, supra note 1, art. 169. Individuals cannot compel the Commission to bring Article 169 proceedings. Case 48/65, Alfons Lutticke GmbH v. Commission, 1966 E.C.R. 19, 27; Case C-87/89, Sonito v. Commission, 1990 E.C.R. I-1981.

113. KAPTEYN & VERLOREN VAN THEMAAT, supra note 8, at 274 (citing Cases 142 & 143/80, Administrazione della Finanze dello Stato v. Essevi, 1981 E.C.R. 1413, 1432-33).

114. Case 51/83, Commission v. Italy, 1984 E.C.R. 2793, 2804; Case 7/69, Commission v. Italy, 1970 E.C.R. 111, 117; Case 31/69, Commission v. Italy, 1970 E.C.R. 25, 33.

115. Kramer, Monitoring the Application of Community Directives on the Environment, supra note 110, at 4 ("Should proceedings be subsequently initiated with the Court of Justice, the facts no longer need to be clarified; the dispute can confine itself to legal issues.").

116. The questions before the Court are usually confined to issues of law. In a preliminary ruling, fact issues are for the national court. In direct actions, the disputes have usually already been narrowed to points of law. As one commentator has noted, "[w]here it has been necessary to evaluate complex economic or accounting arguments, for example in competition cases [before the creation of the Court of First Instance], the Court has sometimes exercised its powers under Article 22 of the Statute of the Court of Justice to call an expert opinion. The same solution may well be adopted in environmental cases …." Jacqueline Minor, The European Court of Justice as an Environmental Tribunal, in CURRENT EC LEGAL DEVELOPMENT SERIES: ENVIRONMENT AND PLANNING LAW 271 (1991). Article 22 of the Statute of the Court of Justice provides: "The Court may at any time entrust any individual, body, authority, committee or other organisation it chooses with the task of giving an expert opinion." EC Treaty, supra note 1, protocol concerning the Statute of the Court of Justice.

117. Case 167/73, Commission v. France, 1974 E.C.R. 359, 368-69.

118. Implementing Community Environmental Law, supra note 107, at 4. See, e.g., Case C-387/97, Commission v. Greece, 1998 O.J. (C 113) 6 (action brought by the Commission on November 17, 1997). The Court of Justice held in its judgment of April 7, 1992 (Case C-45/91, Commission v. Greece, 1992 E.C.R I-2509) that Greece had failed to implement fully Directive 75/442 on Waste, 1975 O.J. (L 194) 39, and Directive 78/319 on Toxic and Dangerous Waste, 1978 O.J. (L 84) 43. Four years later, Greece had still not taken the necessary measures to comply with the judgment. The Commission asked the Court to condemn Greece to a penalty payment of 24,600 ECU per additional day of default.

119. Implementing Community Environmental Law, supra note 107, at 5.

120. The 1992 Treaty on European Union created the office of the Ombudsman. The Ombudsman, an official appointed by the Parliament, receives complaints concerning cases of maladministration in the activities of the Community institutions. EC Treaty, supra note 1, art. 138e(1). The Ombudsman may initiate an inquiry either on his own initiative or in response to a complaint from the person concerned or from a member of Parliament. If the Ombudsman establishes an instance of maladministration, he refers the matter to the institution concerned, which has three months to respond to the Ombudsman's findings. The Ombudsman will then send a final report to the European Parliament and the institution concemed and will inform the complainant of the outcome of his inquiry. The Ombudsman, however, has no formal powers to ensure that the problem of maladministration is resolved.

121. Implementing Community Environmental Law, supra note 107, at 10. The Commission seems to have abandoned an earlier idea to propose a directive creating a new environmental complaint system under which complaints would be made first to national authorities, with recourse to the Commission only where a national authority's response in not adequate or timely.

122. Id. at 13. Some directives already contain provisions on access to justice. See, e.g., Article 4 of Council Directive 90/313 on Freedom of Access to Information on the Environment, 1990 O.J. (L 158) 56 (granting a person who considers that his request for information has been unreasonably refused or ignored the right to seek a judicial or administrative review of the decision).

123. Council Resolution of October 7, 1997 on the Drafting, Implementation, and Enforcement of Community Environmental Law, 1997 O.J. (C 321) 1.

124. Id. at 5.

125. Case 33/76, Rewe v. Landwirtschaftskammer, 1976 E.C.R. 1989, 1997 (emphasis added); see also Case C-312/93, Peterbroeck v. Belgian State, 1995 E.C.R. I-4599.

126. One commentator proposed that the Court of Justice, rather than the Commission, should issue a general ruling announcing that national courts must grant environmental associations locus standi if there are no effective alternative methods in national law to enforce, inter alia, community environmental law. The Court would give national courts broad guidelines to determine the conditions to be met by the applicants. See ARI AFILALO, HOW FAR FRANCOVICH? EFFECTIVE JUDICIAL PROTECTION AND ASSOCIATIONAL STANDING TO LITIGATE DIFFUSE INTERESTS IN THE EUROPEAN UNION (Harvard Jean Monnet Chair Working Paper Series No. 50, 1998). Such a ruling would not be very well received by the member states, which would consider it a serious threat to their procedural autonomy, and which would no doubt blame the Court for its activist approach.

127. See Rod Hunter & Frederic Hendrickx, EU Nations Step Up Environmental Enforcement, NAT'L L.J., Oct. 27, 1997, at B 11; Rod Hunter et al., Environmental Enforcement in Europe, 7 EUR. ENVTL. L. REV. 47 (1998).

128. Originally Title VII. The titles were renumbered by the Treaty on European Union.

129. 1987 O.J. (L 169) 1 (adopted 1985, effective July 1, 1987).

130. The Community has on occasion turned to other powers. See, e.g., Directive 90/642 on the Fixing of Maximum Levels for Pesticide Residues in and on Certain Products of Plant Origin, Including Fruit and Vegetables, 1990 O.J. (L 350) 71 (based on Article 43 of the EC Treaty); Directive 89/629 on the Limitation of Noise Emission from Civil Subsonic Jet Airplanes, 1989 O.J. (L 363) 27 (based on Article 84 of the EC Treaty).

131. 1967 O.J. (L 196) 1.

132. Directive 70/157 on the Permissible Sound Level and the Exhaust System of Motor Vehicles, 1970 O.J. (L 42) 16.

133. Directive 70/220 on Air Pollution by Gases from Positive-Ignition Engines of Motor Vehicles, 1970 O.J. (L 76) 1.

134. Article 100 of the EC Treaty provides:

The Council shall, acting unanimously on a proposal from the Commission and after consulting the European Parliament and the Economic and Social Committee, issue directives for the approximation of such laws, regulations or administrative provisions of the Member States as directly affect the establishment or functioning of the common market.

EC Treaty, supra note 1, art. 100 (emphasis added).

135. Id.

136. Case 91/79, 1980 E.C.R. 1099; see also Case 92/79, Commission v. Italy, 1980 E.C.R. 1115 (same issues and principles).

137. 1973 O.J. (L 347) 51.

138. Case 91/79, 1980 E.C.R. at 1106.

139. Article 235 of the EC Treaty provides:

If action by the Community should prove necessary to attain, in the course of the operation of the common market, one of the objectives of the Community and this Treaty has not provided the necessary powers, the Council shall, acting unanimously on a proposal from the Commission and after consulting the European Parliament, take the appropriate measures.

EC Treaty, supra note 1, art. 235 (emphasis added).

140. EC Treaty, supra note 1.

141. Case 240/83, Procureur de la Republique v. Association de defense des bruleurs d'huiles usagees, 1985 E.C.R. 531, 549.

142. LUDWIG KRAMER, EEC TREATY AND ENVIRONMENTAL PROTECTION 3 (1990).

143. See, e.g., Hodel v. Virginia Surface Mining & Reclamation Ass'n, 452 U.S. 264, 11 ELR 20569 (1981) (upholding the constitutionality of the Surface Mining Control and Reclamation Act under the interstate commerce clause, based on Congress' rational finding that surface mining affects interstate commerce).

144. Case 45/86, Commission v. Council, 1987 E.C.R. 1493, 1520; see also Case 275/87, Commission v. Council, 1989 E.C.R. 259.

145. One can question, in light of the addition of Article 100a, whether Article 100 continues to be of importance. Article 100a (which requires the co-decision procedure and qualified majority voting in the Council), as amended by the Treaty on European Union, provides that it applies "[b]y way of derogation from Article 100" for achieving the objectives set out in Article 7a and may be used for adopting "measures" (i.e., directives and regulations) for those objectives. EC Treaty, supra note 1, art. 100a. Article 7a provides that the Community shall adopt measures "with the aim of progressively establishing the internal market over a period expiring on 31 December 1992 …." Id. art. 7a. Article 100 (which requires the consultation procedure and unanimous voting in the Council) may be used for "directives for the approximation of [national law] as directly affect the establishment or functioning of the common market." Id. art. 100.

Thus, while Article 100a may be used for directives and regulations, Article 100 is confined to directives. More importantly, the adoption of measures is, from the Commission's perspective, easier under Article 100a, with its qualified majority in the Council, than under Article 100, with its unanimous voting requirement. On the other hand, in contrast to Article 100a, Article 100 does not have an "opt-out" clause for more restrictive national measures and, accordingly, may serve as a useful legal basis where the policies to be achieved by the legislation require uniform, Community-wide measures, such as those set forth in Directive 67/548 on Classification, Packaging, and Labeling of Dangerous Substances, 1967 O.J. (L 196) 1.

As Article 100a, Paragraph 1, states that "by way of derogation from Article 100 … the following procedure shall apply," the Council may not choose to base legislation on Article 100 when Article 100a is applicable. EC Treaty, supra note 1, art. 100a(1). See Claus-Dieter Ehlermann, The Internal Market Following the Single European Act, 24 COMMON MKT. L. REV. 361, 382 (1987).

146. EC Treaty, supra note 1, art. 100a(3).

147. Id. art. 100a(4).

148. The question arose whether the "opting-out" procedure of Article 100a would allow member states to introduce new stricter measures, as distinct from continuing to enforce existing stricter measures. Article 100a says that a member state may "apply" national measures. Id. art. 100a(4). Officials in DG XI's Legal Unit argued that the use of "apply" indicates that member states may continue to enforce stricter measures existing at the time of a directive's adoption under Article 100a, but may not introduce new measures.

To clear the uncertainty, the Treaty of Amsterdam will amend Article 100a. In its amended version, Article 100a(4) will provide that if, after the adoption by the Council or by the Commission of a harmonization measure, a member state deems it necessary to maintain national provisions on grounds of major needs referred to in Article 36, or relating to the protection of the environment or the working environment, it shall notify the Commission of these provisions as well as the grounds for maintaining them. Article 100a(5) imposes specific requirements to introduce national rules or regulations after the adoption by the Community of a harmonization measure. After the adoption by the Council or by the Commission of a harmonization measure, a member state may introduce new national provisions only if new scientific evidence relating to the protection of the environment or the working environment show that these provisions are necessary due to a problem specific to that member state arising after the adoption of the harmonization measure. Id.

149. Article 36 provides:

The provisions of Articles 30 and 34 [prohibiting discrimination against trade between the member states] shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of national treasures possessing artistic, historic or archaeological value; or the protection of industrial and commercial property. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States.

EC Treaty, supra note 1, art. 36.

Under this article, and within the limits developed in the Court of Justice's jurisprudence, member states may adopt measures to achieve the "major needs" listed in the article — public morality, public policy, or public health; the protection of health and life of humans, animals or plants; etc. — even though the national measures interfere with the internal market. See notes 161-195 and accompanying text for an analysis of the free movement principle.

150. See Case 302/86, Commission v. Denmark, 1988 E.C.R. 4627.

151. See Pierre Pescatore, Some Critical Remarks on the "Single European Act," 24 COMMON MKT. L. REV. 9 (1987).

152. Germany and Denmark notified a derogation to Council Directive 91/173 on Dangerous Substances, 1991 O.J. (L 85) 34 with respect to restrictions on the use of pentachlorophenol (PCP), which were more stringent than those of the directive. The Commission confirmed both notifications. Commission Decision of 2 December 1992 Confirming the German Regulation on the Prohibition of PCP in Germany, 1992 O.J. (C 334) 8; Commission Decision 96/211 of 26 February 1996 Concerning the Prohibition of Pentachlorophenol (PCP) notified by Denmark, 1996 O.J. (L 68) 32. The Court of Justice annulled the Commission's authorization of the German derogation for lack of reasoning (Case C-41/93, France v. Commission, 1994 E.C.R. I-1829). The Commission simply stated that "the national provisions apply without distinction to both national and imported products. They are designed to protect public health and the environment and do not seem to be a manifestly disproportionate way of attaining these objectives. Furthermore, they do not appear to be a means of arbitrary discrimination or a disguised restriction on trade between the member states." Commission Decision of 2 December 1992 Confirming the German Regulation on the Prohibition of PCP in Germany, 1992 O.J. at 8. The Court held that the Commission had failed to set out the reasons of fact and law that had lead it to the conclusion that the conditions set out in Article 100a(4) were fulfilled and annulled the decision. The Commission adopted subsequently a new decision confirming the German derogation. Decision 94/783, 1994 O.J. (L 316) 43. The Netherlands provided notice of a derogation to Council Directive 91/338 Amending for the Tenth Time Directive 76/769 Relating to Restrictions on the Marketing and Use of Dangerous Substances, 1991 O.J. (L 186) 59. The Netherlands wanted to apply more restrictive cadmium limits for polyvinyl chloride and other plastics. Under pressure from the Commission, the Dutch government decided to withdraw its application for a derogation. See Netherlands Moves to Bring Cadmium Limits Into Line With EU, 7 ENVIRONMENTAL WATCH W. EUR. 7 (1998).

153. See the amendments to Article 100a(4) introduced by the Treaty of Amsterdam, supra note 148.

154. The subsidiarity principle was first introduced into the environmental title of the EC Treaty. EC Treaty, supra note 1, art. 130r, para. 4 (reference to the version of Article 130r that existed prior to the Treaty on European Union). Since the Treaty of European Union, this principle applies to all Community measures. EC Treaty, supra note 1, art. 3b, para. 2.

In areas which do not fall within its exclusive competence, the Community shall take action, in accordance with the principle of subsidiarity, only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States and can therefore, by reason of the scale or effects of the proposed action, be better achieved by the Community.

See Case C-233/94, Germany v. Parliament, 1997 E.C.R. I-2405 (holding that Article 3b, combined with Article 190, requires a statement of reasons of Community action). While subsidiarity may be a fine political objective, the legal effect is chimerical. See Rod Hunter, The Misplaced Faith in Subsidiarity, WALL ST. J. EUR., Aug. 18-19, 1995, at 6.

155. EC Treaty, supra note 1, art. 130r, para. 2.

156. Id. para. 3.

157. Id. art. 130s.

158. See notes 11-19 and accompanying text for a description of the different legislative procedures.

159. See Resolution of the Council and Representatives of the Governments of the Member States of 1 February 1993 Concerning the European Community Program of Policy and Action in Relation to the Environment and Sustainable Development Towards Sustainability (Fifth Environmental Action Program), 1993 O.J. (C 138) 1; Amended Proposal for a European Parliament and Council Decision on the Review of the European Community Program of Policy and Action in Relation to the Environment and Sustainable Development Towards Sustainability, 1997 O.J. (C 28) 18.

160. EC Treaty, supra note 1, art. 130t.

161. Id. art. 3(c).

162. The Single European Act of February 17, 1986 inserted a new Article 8a into the EC Treaty. That provision became Article 7a when the Treaty on European Union came into force.

Article 7a refers to the Community as an "internal market," while a number of the original provisions of the EC Treaty (e.g., Articles 2 and 8) use the term "common market." The question arose whether there was a difference between those two concepts. See Pescatore, supra note 151, at 9, 11; see also Ehlermann, supra note 145, at 361, 369. The Court's case law seems to suggest the two terms are synonymous. See Case 15/81, Gaston Schul v. Inspecteur des Douanes, 1982 E.C.R. 1409 (holding that the "common market involved the elimination of all obstacles to intra-Community trade in order to merge the national markets into a single market bringing about conditions as close as possible to those of a genuine internal market").

163. Opinion 1/91 Delivered Pursuant to the Second Subparagraph of Article 228(1) of the Treaty, 1991 E.C.R. I-6079.

164. EC Treaty, supra note 1, art. 9.

165. Id. arts. 13-17, The original deadline for the abolition of all custom duties was in fact advanced from January 1, 1970 to July 1, 1968.

166. Id. art. 12. Case 26/62, Van Gend en Loos, 1963 E.C.R. 1, the case wherein the Court of Justice for the first time developed the concept of direct effect of community law concerned the interpretation of this provision. See supra notes 48-60 and accompanying text.

167. But see Case 7/68, Commission v. Italy, 1968 E.C.R. 423 (concerning an Italian tax on the export of art treasures). Italy argued that the art objects were of artistic, rather than commercial value and that the purpose of the tax was to retain national treasures within the country. Therefore, the tax would not enter into the scope of Article 12. The Court rejected these arguments, holding that the prohibition on custom duties applies to all cases where a tax was imposed on goods by reason of their crossing a border.

168. Case 24/68, Commission v. Italy, 1969 E.C.R. 193.

169. Case 63/74, Cadsky v. Instituto Nazionale per il Commerci Estero, 1975 E.C.R. 281.

170. Case 24/68, 1969 E.C.R. at 200; see also Case 2 & 3/69, Sociaal Fonds voor de Diamantarbeiders v. SA Ch Brachfeld & Sons, 1969 E.C.R. 211, 222.

171. See Case C170/88, Ford Espana v. Spain, 1989 E.C.R. 2305. Spain imposed a charge of 0.165 percent of the value of the declared value of cars Ford imported into Spain, arguing that the charge corresponded to the benefit the importer enjoyed because he could carry out custom formalities at the place of destination rather than at the frontier. The Court of Justice held that even if a specific benefit could be shown, the flat rate of the charge was not related to the cost of the service.

172. Case 302/86, Commission v. Denmark, 1988 E.C.R. 4607.

173. Id. at 4624.

174. Case C-169/89, Gourmetterie Van den Burg, 1990 E.C.R. I-2143.

175. Case 380/87, Enichem Base v. Commune di Cinisello Balsamo, 1989 E.C.R. 2491.

176. Case C-2/90, Commission v. Belgium, 1992 E.C.R. I-4431.

177. Article 30 provides that "quantitative restrictions on imports and all measures having equivalent effect shall, without prejudice to the following provisions, be prohibited between member states." EC Treaty, supra note 1, art. 30.

Quantitative restrictions mainly concern quotas and similar measures amounting to a total or partial import ban. Quotas as such were virtually eliminated by 1955, as a result of a decision of the Council of the Organization for Economic Co-operation and Development (now the OECD) to raise the minimum level of trade liberalization to 90 percent of the value of imports. See NICHOLAS GREEN ET AL., THE LEGAL FOUNDATIONS OF THE SINGLE EUROPEAN MARKET 50-51 (1991). Most issues that now arise concern so-called measures having equivalent effect.

178. Case 8/74, Procureur du Roi v. Dassonville, 1974 E.C.R. 837.

It is not necessary to show that a measure distinguishes between national and imported products or that the authors of the act had the intention to restrict trade, Moreover, the Court has emphasized that Article 30 does not distinguish between measures having an equivalent effect according to the degree to which trade is affected: "If a national measure is capable of hindering imports it must be regarded as a measure having an effect equivalent to a quantitative restriction, even though hindrance is slight and even though it is possible for imported goods to be marketed in other ways." Joined Cases 177 and 178/82, Van de Haar & Kaveka de Meern, 1984 E.C.R. 1797, 1813.

179. In Joined Cases C-267/91 and C-268/91, Criminal Proeedings v. Keck & Mithouard, 1993 E.C.R. I-6126, the Court distinguished between rules that lay down requirements to be met by goods coming from other member states where they are lawfully manufactured and marketed (e.g., rules relating to designation, form, size, weight, composition, presentation, labeling, and packaging) on the one hand, and national provisions restricting or prohibiting certain selling arrangements, on the other. Id. at I-6131.

The Court was asked whether national legislation imposing a general prohibition on resale at a loss is a measure having equivalent effect. The Court held that:

[T]he application to products from other Member States of national provisions restricting or prohibiting certain selling arrangements is not such to hinder directly or indirectly, actually or potentially, trade between Member States within the meaning of the Dassonville judgment, so long as those provisions apply to all relevant traders operating within the national territory and so long as they affect in the same manner, in law and in fact, the marketing of domestic products and those from other Member States.

Id. The Court concluded that national legislation imposing a prohibition on resale at a loss does not fall within the scope of Article 30.

Since Keck, it has become necessary to distinguish between "product requirements" and "marketing requirements" in order to determine what rules constitute measures having equivalent effect falling within Article 30. "Product requirements" concern measures that relate to the inherent characteristics of products. For this category, the Dassonville formula continues to apply. Marketing requirements are measures regulating matters extrinsic to the products themselves. For this category, it does not suffice to show that a national rule adversely affects marketing opportunities for imported products. One must also prove that it affects imported products more than similar domestic products. See Laurence Gormley, Reasoning Renounced? The Remarkable Judgment in Keck and Mithouard, 5 EUR. BUS. L. REV. 63 (1994).

Environmental measures can fit into both of these categories. Some member states have, for instance, banned the use of lead in batteries, claiming that lead batteries considerably contribute to soil pollution when they end up in landfills. Such a ban clearly is a product requirement and, moreover, constitutes a measure having equivalent effect. It will thus be for the member state to show that the measure is justified on environmental grounds and proportionate to its stated goal. Other member states have imposed take-back and recovery obligations on those selling batteries. Producers, importers, distributors, and retailers are obliged to take spent batteries back, and producers have to ensure that a percentage of the collected batteries are recovered. The take-back obligation constitutes a marketing requirement and will likely fall foul of Community law only if it affects imported goods more than domestic goods.

180. See EC Treaty, supra note 1, art. 36. Article 36 provides that:

[T]he provisions of Articles 30 to 34 shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of national treasures possessing artistic, historic or archaeological value; or the protection of industrial and commercial property. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States.

181. Case 120/78, Rewe Zentrale v. Bundesmonopolverwaltung fur Branntwein, 1979 E.C.R. 649.

182. Id. at 662 (emphasis added).

183. Case 302/86, Commission v. Denmark, 1988 E.C.R. 4627, 4630; see also Case 240/83, Procureur de la Republique v. ADBHU, 1985 E.C.R. 532.

184. Case 124/81, Commission v. United Kingdom, 1983 E.C.R. 203; see also Case 25/88, Criminal Proceedings v. Wurmser, 1989 E.C.R. 1105.

An important consequence of this principle is that a member state must take into account the existing measures and safety controls in the country of origin of the imported goods (the so-called mutual recognition principle). If the standard is considered equivalent, there is no need for a domestic measure (i.e., the measure is not necessary for the achievement of the national objective). Although the Court of Justice accepts that a member state may require that a product, which has already received approval in another member state, undergoes a fresh procedure of examination and approval, the member states are nevertheless required to "assist in bringing about a relaxation of the controls existing in intra-Community trade and to take account of technical or chemical analyses or laboratory tests which have already been carried out in another member state." Case C-293/94, Criminal Proceedings v. Jacqueline Brandsma, 1996 E.C.R. I-3159, I-3177. A member state will have to be able to show, using authoritative scientific grounds, why the requirements applied in another member state where the product is lawfully marketed, do not suffice. Case 178/84, Commission v. Germany, 1987 E.C.R. 1227; Joined Cases C-13/91 and C-113/91, Criminal Proceedings v. Michel Debus, 1992 E.C.R. I-3617 (concerning maximum levels of sulfur dioxide in beer).

185. Case 302/86, 1988 E.C.R. at 4630.

186. Id.

187. See STEPHEN WEATHERILL & PAUL BEAUMONT, EC LAW 452 (1993).

188. Case C-2/90, Commission v. Belgium, 1992 E.C.R. I-4431.

189. Id. at I-4478.

190. Id. at I-4479.

191. Id. (emphasis added).

192. See also Case C-379/92, Criminal Proceedings v. Matteo Peralta, 1994 E.C.R. I-3453. An Italian law prohibited any vessel in Italian territorial waters and internal maritime waters from discharging hydrocarbons or hydrocarbon mixtures or any other substances harmful to the marine environment into the sea. The law prohibited vessels flying the Italian flag to discharge such substances even outside the territorial waters. The Pretora Circondariale di Ravenna (the District Magistrate's Court) asked the Court of Justice whether the Italian legislation was compatible with, among other things, Article 30. The Court held that the restrictive effects that the law might have on the free movement of goods were too uncertain and indirect. Id. at I-3497.

193. The attitude of the Court of Justice can be contrasted with the U.S. Supreme Court's ruling in Fort Gratiot Sanitary Landfill v. Michigan Department of Natural Resources, 504 U.S. 353, 22 ELR 20904 (1992). The court held that a state law banning imports of solid waste from another state, except when explicitly authorized in the receiving county, "unambiguously discriminate against interstate commerce and are appropriately characterized as protectionist measures that cannot withstand scrutiny under the Commerce Clause." Id. at 367-68, 22 ELR 20907. The court rejected the argument that the ban was necessary to conserve the landfill capacity of the state and to protect the health of the state's citizens. The court held that "[b]ecause those provisions unambiguously discriminate against interstate commerce, the State bears the burden of proving that they further health and safety concerns that cannot be adequately served by nondiscriminatory alternatives." Id. at 366, 22 ELR 20907; see also Chemical Waste Management, Inc. v. Hunt, 504 U.S. 334, 22 ELR 20909 (1992).

194. However, when the Community has regulated a certain area of law, a member state will not be able to create additional restrictions on environmental grounds. See, e.g., Case C-1/96, The Queen v. Minister of Agriculture, Fisheries & Food, 1998 E.C.R. I-1251 (holding that the United Kingdom could not ban exports of live cattle to Spain to prevent them from being reared in the veal crate system used in that member state); Court of Justice Directive 91/629 Laying Down Minimum Standards for the Protection of Calves, 1990 O.J. (L 340) 28 (imposed minimum requirements for rearing calves). The Court held that in adopting the directive, the Community legislature laid down exhaustively common minimum standards. Therefore, the United Kingdom could not rely on Article 36 to restrict the export of calves to another member state that has implemented the directive.

195. EUROPEAN COMMISSION, SINGLE MARKET SCORECARD 5 (November 1997); see also Rod Hunter, Europe's Hidden Trade Barriers, WALL ST. J. EUR., Mar. 5, 1998, at 8.

196. Council Directive 83/189 of 28 March 1983 Laying Down a Procedure for the Provision of Information in the Field of Technical Standards and Regulations, 1983 O.J. (L 109) 8; Council Directive 88/182 of 22 March 1988 Amending Directive 83/189, 1988 O.J. (L 81) 75; Directive 94/10 of the European Parliament and the Council of 23 March 1994 Materially Amending for the Second Time Directive 83/189, 1994 O.J. (L 100) 30.

197. Council Directive 83/189, supra note 196, art. 8(1).

198. Id. art. 1(1) & 1(5). According to AG Colomer, technical regulations are legislative and administrative rules and practices subjecting the production and marketing of goods to certain conditions. Case C-273/94, Commission v. Netherlands, 1996 E.C.R. I-31.

199. Council Directive 83/189, supra note 196, art. 8(1).

200. Id. art. 9(2).

201. Id. art. 9(3). If the Commission announces that it intends to propose a Community measure (directive, regulation, or decision) on the same matter, the notifying state has to postpone the adoption of the regulation for 12 months.

202. Case C-194/94, CIA Security Int'l SA v. Signalson SA & Securitel SPRL, 1996 E.C.R. I-2201, I-2246.

203. However, the Court recently restricted the possibility for private individuals to invoke in national proceedings the failure of a member state to notify a technical regulation. Case C-226/97, Johannes Martinus Lemmens (judgment of June 16, 1998 not yet reported). There, the Court held that only those who would be able to rely on the EC Treaty rules guaranteeing the free movement of goods have an interest in the application of the Technical Standards Directive.

204. Agreement on the European Economic Area: Final Act, 1994 O.J. (L 1) 3 [hereinafter Agreement].

205. Id. art. 89(1).

206. Id.

207. Id. art. 90(2).

208. Id. art. 92(1).

209. Id. art. 93(2).

210. Id. arts. 93(2), 99, 100, 102 & 103.

211. Id. art. 102(1). See, e.g., Decision of the EEA Joint Committee 50/97 of 27 June 1997 Amending Annex XX (environment) to the EEA Agreement, 1998 O.J. (L 193) 37.

212. Agreement, supra note 204, art. 102(4).

213. Id. art. 108(1).

214. Opinion 1/91 Delivered Pursuant to the Second Subparagraph of Article 228(1) of the Treaty, 1991 E.C.R. 6079.

215. Agreement, supra note 204, art. 105(1).

216. Id. art. 111.

217. Id. art. 105(3).

218. Id. art. 3.

219. Id. art. 6.

220. Id. art. 8(1).

221. Id. art. 13.

222. Id.

223. Id. art. 14.

224. In Case T-115/94, Opel Austria GmbH v. Council, 1997 E.C.R. II-39, the Court of First Instance held that at least some provisions of the EEA Agreement may have direct effect if they are unconditional and sufficiently precise. See Walter Van Gerven, The Genesis of EEA Law and the Principles of Primacy and Direct Effect, 16 FORDHAM INT'L L.J. 955 (1992-1993) and Robert Gladstone, The EEA Umbrella: Incorporating Aspects of the EC Legal Order, 21 LEGAL ISSUES OF EUR, INTEGRATION 39 (1994) for a discussion of direct effect under the EEA Agreement.

225. Agreement, supra note 204, at 97.

226. Id.

227. One might well wonder about the ultimate significance for EEA law of this provision. The preamble suggests that there is not to be a transfer of legislative powers from the EFTA states to the EEA, but surely the EEA Agreement does transfer legislative power to the EEA Joint Committee, if not to the EC. The protocol states that the EFTA states will introduce a provision, "if necessary," providing for the supremacy of EEA law. What is meant by "if necessary"? Is the suggestion that EEA law may have preemptive effect even in the absence of a national statutory provision? If so, this would in a strict sense go beyond current EC law.

228. 1967 O.J. (L 196) 1.

229. 1988 O.J. (L 187) 14.

230. Agreement, supra note 204, Annex II, pt. XV, §§ 1 & 10.

231. 1983 O.J. (L 109) 8, See supra notes 196-204 and accompanying text discussing Directive 83/189.

232. Agreement, supra note 204, Annex II, pt. XIX, § 1.

233. Id. art. 75.

234. Id. art. 78.

235. Id. art. 80.

236. Agreement, supra note 204, Protocol 31 on cooperation in specific fields outside the four freedoms, at Article 3.

237. Agenda 2000, Volume I — Communication: For a Stronger and Wider Union, COM(97)379 [hereinafter Agenda 2000].

238. See 1998 O.J. (C 121) 1.

239. Agenda 2000, supra note 237, at 61.

240. Id. at 65.

241. Id. Acquis denotes the whole of Community legislation as it is interpreted by the Court of Justice.

242. Id.

243. Id.

244. Id.

245. Agenda 2000, Volume II — Communication: Reinforcing the Pre-Accession Strategy, COM(97)380 at 4.

246. Id.

247. Id.

248. Id. at 9.

249. Id. Phare — the EC's aid program for Central and Eastern European countries — was set up in 1989. The Phare program provides both know how (e.g., policy advice and training) and financial assistance to Central and Eastern European countries. Its aim is to assist and financially support former communist countries with the establishment of a market economy and the democratization process.

250. Id. at 10.

251. Id. at 11.

252. Id. at 12.

253. Agenda 2000, supra note 237, at 65.

254. Commission Press Release IP/98/395 (May 5, 1998); see supra note 127 and accompanying text for a discussion of IMPEL.

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